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!
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!
Well, I might sell a little bit of them, but not very much, and even if I sell a little I’m likely to buy more of another of them. The four funds that make up the vast majority of my portfolio–the portfolio which I discuss every month here–are not going anywhere, although I may have to shuffle their asset allocation a bit. Those would be four different Vanguard funds: the Vanguard Total Stock Market Index Fund (VTSMX), Vanguard Total International Stock Index Fund, Vanguard GNMA Fund (VFIIX), and Vanguard Total Bond Market Index Fund (VBMFX).
Since they’re from Vanguard, expect low costs. For the index funds, expect diversification. And from the bond funds, expect quality. I cannot say enough about how much I like the low costs, diversification, and performance of these four funds. I plan on keeping them as the cornerstone of my portfolio forever.
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!
Last time we looked at the performance of domestic stocks, which have returned about 20% year to date, depending on which index you look at. Today let’s look at another important part of a stock portfolio: international stocks.
International stocks tend to be more volatile, but with higher upside, than domestic stocks, and this year shows the upside. The Vanguard Total International Stock Index Fund (VGTSX), which is the international representative in my portfolio, is up a rocking 29.75% year to date! That’s almost 50% better than the domestic indices. This fund tracks the Total International Composite Index, including the MSCI Europe, Pacific, and Emerging Market Indices.
While international stock funds have done better than domestic stock funds for awhile, they also have more volatility. So while they make up a significant part of my portfolio, they’re considerably smaller than the domestic stocks and a bit smaller than domestic bonds.
I think that every portfolio could use some international exposure. This year’s performance has shown why.
With just about a month to go, it’s been a tremendous investing year in spite of the huge dive stocks took until March of this year. Let’s see how domestic stocks have performed year to date:
Our benchmark index, the S&P 500, is up 20.41% for the year to date, an impressive performance by any account. The domestic stock fund I use in my model portfolio the Vanguard Total Stock Market Index (VTSMX), which tracks the even broader MSCI US Broad Market Index , is up 18.46% year to date, a little worse but offering more diversification.
Both of those are impressive numbers. For this year, domestic stocks have performed very, very well, maintaining its place as the largest single holding in my portfolio.
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!
