 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on VBINX
- Balanced Portfolios Delivered Better Returns and Lower Risk
10/18/2011
John Wasik at Reuters wrote the following article Balancing your portfolio in a bonkers market. He stated:
"Long-term, the middle route makes a huge difference. From 1926 through 2010, according to a recent T. Rowe Price study, a balanced portfolio delivered returns above 10 percent almost as frequently as an all-stock portfolio — with 40 percent less volatility."
"You could also build a balanced portfolio on your own by buying the two SPDR funds I mentioned above. Buy them through a deep-discount broker or find their equivalents commission-free through Fidelity Investments, Charles Schwab or the Vanguard Group.
Want to take the balanced approach one-step further? Consider an ultra-balanced approach with at least 12 separate funds representing seven asset classes, such as the ones found in the 7-12 portfolio. Over the past five years, the passive version of 7-12 has returned 4.8 percent, compared with 3.87 percent for the Vanguard Balanced Index and 0.71 for the Vanguard 500 Index fund, according to Israelsen, who designed the portfolio."
Read the complete article here >>
Meanwhile, MyPlanIQ maintains a list of lazy portfolios on Lazy Portfolios. You can find that on ETFs or Mutual Fund Portfolios.
Also, check out Israelsen's 7Twelve lazy portfolio/plan.
To compare S&P 500 (Vanguard 500 Index Fund VFINX) performance with Vanguard Balanced Index Fund (standard 60% US stocks, 40% bonds balanced funds VBINX), click here.
You can also find a quote and its total return performance in a given period by going to a quote page such as VFINX and click on 'Total Returns and Statistics' tab.
- Two Factors That Make Picking Stocks So Hard
07/08/2011
Lowell Herr at ITA Wealth Management published an excellent article on SeekingAlpha.com on the difficulty of picking stocks. In the article, he gave the following two factors:
- There are too many metrics to measure a stock such as growth, value, cash flow, momentum etc. Let's say there are 10 metrics to pick a stock and you would like to choose only two metrics out of these ten. This would mean that you have 10!/3!*(10-3)! = 120 ways to select these two metrics, let alone for each metric, you have to again arrive correct threshold numbers.
- You are trading against great investors like Warren Buffett. This further diminishes your odds of winning.
He concluded that the best way for average individual investors to invest is through diversified index funds and focuses on asset allocaitions (we might add). See how a simple asset allocation strategy with only 6 ETFs (VTI, VEU, VWO, VNQ, DBC, BND) as candidate funds would beat many pros. The following shows the performance comparison among Six Core Asset Strategic and Tactical Asset Allocation moderate portfolios and some balanced funds such as Vanguard Balanced Fund Index (VBINX), Vanguard 500 Index (tracking S&P 500) and Fidelity Asset Manager 60% (60% in stocks).
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe VFINX 28% 222% 4% 11% 3% 7% VBINX 19% 244% 6% 31% 5% 27% Six Core Asset ETFs Tactical Asset Allocation Moderate 17% 191% 10% 72% 15% 105% Six Core Asset ETFs Strategic Asset Allocation Moderate 20% 234% 5% 24% 8% 39% FSANX 24% 253% 7% 35% For more performance comparison info, see here.
Symbols: VTI, VEU, VWO, VNQ, DBC, BND, VFINX, SPY, VBINX, FSANX, Asset Allocation
Exchange Symbols: (VTI), (VEU), (VWO), (VNQ), (DBX), (BND), (SPY)
- Beating The Market Is Easy: Just Make Lots of Noise To Confuse
06/27/2011
Jason Zweig, the Wall Street Journal's The Intelligent Investor's columnist recently wrote: "Beating the market is easy. Just understate its performance. Various investment promoters are touting their stock-picking prowess by comparing their returns, including dividends, to the Standard & Poor's 500-stock index without dividends."
In the article, he specifically referred to The Street.com's Jim Cramer's recent email promotion. We quoted the article here: "with the subject line "My portfolio is CRUSHING the S&P 500," the email said Action Alerts PLUS is "producing some truly incredible results." From Jan. 1, 2002, to April 1, said the email, the portfolio's "total average return has averaged more than DOUBLE the return of the S&P 500." An accompanying bar graph showed the S&P 500 returning 15.5%, versus 39.2% for Mr. Cramer's portfolio."
But if you included the S&P dividend in the calculation, the cumulative performance of Action Alerts PLUS would be only 0.9% higher over the total S&P 500 return. Yes, it is still higher, but it also comes with 774 trades in the past 3 years, not counting the annual subscription fee of $299.95 (the first year).
Cramer is not alone. There are tons of this 'oversight' promotion touting products that beat S&P 500 or other market indices big time.
Do you want to get the excitement and confused? That would be up to you. In the meantime, if you want to a simple yet trackable portfolio, day in and day out, look at MyPlanIQ's Six Core Asset ETFs that consists of only six ETFs: VTI, VEU, VWO, VNQ, DBC, BND. Here are the portfolio performance comparison:
Portfolio Performance Comparison
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Six Core Asset ETFs Strategic Asset Allocation Moderate 16% 159% 4% 16% 8% 39% Six Core Asset ETFs Tactical Asset Allocation Moderate 12% 123% 8% 68% 15% 107% SPY 20% 107% 1% -1% 2% 4% VBINX 14% 139% 4% 20% 5% 25% VFINX 19% 106% 1% -0% 2% 4%
More detailed comparison, see here.By the way, all of our performance numbers are total return (i.e. including dividend reinvested) based. You won't conveniently misled due to some oversight errors.
Symbols: VTI, VEU, VWO, VNQ, SPY, DBC, BND, VFINX, VBINX, Portfolio Strategy
Exchange Tickers: (VTI), (VEU), (VWO), (VNQ), (SPY), (DBC), (BND)
