February, of course, is the shortest month of the year, but it seems it was long on gains for our model portfolio. Let’s look at how our funds did last month:
The Vanguard Total Stock Market Index (VTSMX) was up 1.86% in February, while still paying that 1.94% yield. In our international segment, the Vanguard Total International Stock Index (VGTSX) was down 1.44% and paying a 2.51% yield, meaning that while not having a spectacular month, the stock portion of our portfolio had a positive gain.
In the fixed income section of our portfolio, the Vanguard Total Bond Market Index (VBMFX) was essentially flat, up a penny, but a statistical 0.00% increase, with a yield of 3.96%. Our other fixed income fund, the Vanguard GNMA Fund (VFIIX) was up a little more, 0.12% and yielding 3.71%.
So, while it wasn’t a great month, it was a positive one for three of our four funds and the majority of our portfolio. Let’s hope March keeps building on these gains!
As those of you who have followed this blog for awhile know, I have a model portfolio made up of four funds, two stock and two bond, that I track regularly. This is actually essentialy the portfolio I have in my 403(b) as well.
Any portfolio where asset allocation is a consideration–that would be every investment portfolio–needs periodic adjustment. For me, that adjustment happens yearly. Quite frankly, if the adjustments are very minor I often leave the portfolio alone, just because it’s often more trouble than it’s worth. That’s not the case this year.
If making adjustments to your portfolio, please consider fees (commissions from sales, for instance) and taxes (which is not an issue here since these funds are all contained within a 403(b)).
Also, consider what your overall asset mixes are. For instance, last year I decided on a more aggressive than usual 75% stock/25% bond allocation; this year I’m going back to my usual 70% stock/30% bond mix. Of the stock allocation, 47.5% is a domestic stock index and 22.5% is an international stock index; with bonds, 15% will be a total bond index and the other 15% will be a GNMA fund.
To match those up with the funds I discuss in the model portfolio posts, the domestic stock fund is the Vanguard Total Stock Market Index (VTSMX), the international stock fund is the Vanguard Total International Stock Index (VGTSMX), the domestic bond index fund is the Vanguard Total Bond Market Index (VBMFX), and the GNMA fund is the Vanguard GNMA Fund (VFIIX).
Turns out that I will need to take a bit off both my domestic and international stock funds and put them mostly into VFIIX but a little into VBMFX. I will work on that today!
Let’s be honest: 2009 was a banner year for investing. How will 2010 fare? Early in the month it was looking like 2010 would be picking up right where 2009 left off, but the end of the month showed pretty mediocre results:
The Vanguard Total Stock Market Index (VTSMX) ended the month down 5.09%, despite starting the month quite well–remember, this is the largest single component in our portfolio and pays a 1.94% dividend yield. The Vanguard Total International Stock Index (VGTSX) did worse, down 7.44% while paying a 2.51% dividend yield.
In the fixed income portion of our portfolio, the Vanguard Total Bond Market Index (VBMFX) finished January up 1.16% while paying a healthy 3.96% dividend yield and the Vanguard GNMA Fund (VFIIX) up a tiny 0.94% but paying a 3.71% yield.
It wasn’t the best month, but let’s see how the rest of the year goes. Investing year 2010 has just begun!
It’s tax time and I am trying to gather my tax forms from a few different financial institutions, some of which I have accounts that are either untouched (emergency fund money gaining a small bit of interest) or on autopilot (making regular investments every month).
In the process, despite having passwords I am sure are correct, I have been locked out of two accounts and have to call to get access restored. The most hideous offender in the overly secure account category is Treasury Direct, where I have now been locked out three times; I used to be very happy with them but awhile back they started using an onscreen keyboard with somewhat randomly placed keys in combination with a bizarre plastic security card where you had to play what was like a virtual game of bingo to get your account accessed.
If there was a better alternative to them I’d use that. While I appreciate the need for making sure people’s money is safe, there’s nothing more annoying than an overly secure account–resulting in a lockup.
I have to get this fixed soon, not just so I can make sure I still have the proper buys scheduled, but to get my tax forms.
As usual I’ve been giving monthly updates of the performance of our model portfolio, consisting of four different Vanguard funds, the same ones I said I’m definitely not selling. You know these by heart already, so let’s see how they did for the year rather than just the month:
The Vanguard Total Stock Market Index (VTSMX) finished the year up 22.22%. Remember that this fund also yields 1.88% at current and makes up the largest portion of our portfolio. The Vanguard Total International Stock Market Index Fund (VGTSX) did an even better 30.87% and right now pays a dividend yield of 2.24%. As you can see, the stock portion of our portfolio did fabulously.
In the fixed income portion of our portfolio, the Vanguard Total Bond Market Index (VBMFX), was up 1.57% while putting out a very nice 4.04% yield. Similarly, the Vanguard GNMA Fund (VFIIX) was up, but a marginal 0.662% while paying a current yield of 3.99%.
Overall, every single one of these funds was up, and it was a great year for investing (remember, early this year the markets looked like they were on the brink of collapse)! Let’s see how things go in 2010.
I’ve been very happy with the way our model portfolio has performed this year, and I believe that December was just as much of a winner as the year had been to date. Let’s take a look at the numbers and see how things went.
The Vanguard Total Stock Market Index Fund (VTSMX) was again up, less than a percent, but up, 0.92%; in addition remember this fund pays a dividend yield of 1.88%. The Vanguard Total International Stock Index Fund (VGTSX) was actually down, 3.61%, but remember, the fund yields a decent 2.24%. On the fixed income side of the equation, the Vanguard GNMA Fund (VFIIX) was also down, 2.21%, while yielding 3.99%, and the Vanguard Total Bond Market Index (VBMFX) was down as well, 1.71%, with a yield of 4.04%.
Despite the fact that three of the four funds in the portfolio were down for the month, overall the portfolio was up, a combination of the fact that VTSMX was the largest holding in it and all of the dividend yields that the various funds paid.
While it wasn’t a spectacular month for our portfolio, it was a positive one, and I’ll take those any days over the alternative!
It’s been a great year for investing, and November ended up being no exception. After a mostly sideways October, let’s see what kinds of gains we made in our personal model portfolio for the month of November 2009:
The Vanguard Total Stock Market Index Fund (VTSMX), making up the largest share of our portfolio, was up another 5.05% in November. Remember that this fund also yields 1.99%. The Vanguard Total International Stock Fund (VGTSX) was also up, this time 3.12%, while yielding 2.32%. In the fixed income portion of our portfolio, the Vanguard GNMA Fund (VFIIX) was also up, 1.11%, while yielding a very impressive 4.16%. And finally, the Vanguard Total Bond Fund (VBMFX) was up 1.15% with a 4.15% yield.
Overall, it was another great month in investing, and aside from the largely sideways October, since March our portfolio–just like the stock market as a whole–has done fabulously. Let’s hope December closes out strong!
In my parenting class, we discuss finances once a session, and I typically write a really simple equation on the board while we’re discussing it:
Income – Expenses = ?
The point of the equation is that you end up with some number after subtracting all your expenses from your income, and if the number is negative, you’re running a deficit; if deficits continue, they will inevitably become debt.
On a smaller scale, this also points out to the participants that there really are only two things they can do to improve their financial situation–increase their income or reduce their expenses. So, that said, what can people do to actually increase their income?
There’s only a few things:
1) Get a better paying job. This may be the single most common thing that happens for people to increase their income. Yes, money talks, although other issues like schedules, commutes, and quality of life play a large part in changing jobs.
2) Get a second job/open a small part time business. This blog is an example of a small part time business that makes a bit of income. In addition, I actually have a second job teaching a couple of nights a week. These two have boosted my income approximately 30%.
3) Invest in something that creates income. An example might be dividend paying stock, or quality bonds or a bond fund (think Vanguard GNMA Fund, for instance). This requires a large initial outlay of money to do, but can be a way to increase your income without doing more work.
There really aren’t many more options to increasing your income. Just a few ways, and this is one of only two ways to really influence your financial situation. Can you think of other ways to increase your income?
Let’s face it–especially considering just how horrible things looked in early March, our model portfolio has had a splendid year–and if the performance through March had simply been breakeven, it would be a fantastic year. Let’s see how things went as the kids went back to school and our summer slipped away.
The Vanguard Total Stock Market Index (VTSMX) continued its upward climb, up 6.10% in September alone! For the year, it’s up 16.16%–what a reversal from its early year plunge. Remember, this fund also pays a dividend yield of 2.11%.
The Vanguard Total International Index (VGTSX) was also up, an even better 7.52% for the month, and a very hot 29.88% for the year. This fund also pays a dividend yield, even stronger than the domestic VTSMX–2.39%.
In the fixed income portion of our portfolio, the Vanguard GNMA Fund (VFIIX) was again up, but a microscopic fraction .003% but paying a 4.42% yield. And finally, the Vanguard Total Bond Index (VBMFX) was also its usual steady self, up a super tiny .007% while continuing to pay its 4.32% yield.
All in all, it’s been a great month and a fantastic year. Let’s hope things keep rolling through the rest of 2009!
It’s been a wild ride up since March; the major indices which had plunged to almost 1/2 their all time highs have now reclaimed a lot of that ground again, at an absolutely staggering pace. The Vanguard Total Stock Market Index Fund (VTSMX) ended the month up another 1.99%, and for the year is up 11.98%, as well as paying a nice 2.18% dividend yield.
The Vanguard Total International Stock Index Fund has done even better year to date, up a staggering 23.43% and was up 0.816% in August. Remember this fund also pays a dividend yield of 2.47%.
Finally, in the fixed income portion of our portfolio, the Vanguard GNMA Fund was up another 0.47% for the month and 1.23% for the year, with a yield of 4.51%; the Vanguard Total Bond Index Fund was up 1.07% for the month, 2.17% for the year, and pays a dividend yield of 4.40%.
It’s been a great investing year even if it hasn’t eliminated all of the losses of the past year and a half. Let’s hope September continues to rock on!
