Retiree Portfolio Update
As of today, the total NAV for the Retiree Portfolio has exceeded the 10% CAGR (compound annual growth rate) that was my goal for this year. I nearly can't contain the excitement over reaching this goal early. Come to think of it, this was achieved despite the following:
- Not all of the Retiree's assets were fully allocated to their targets. 8% of total assets are still parked in our temporary "holding" fund, Wellington, which has returned 9.27% YTD-- not shabby at all for a lil' 60/40 well-blended, almost-no-cost fund. 21% of the portfolio sits in very un-sexy, low-class money market funds.
- By the same token, the above funds were to be used to fill out the remaining portions of the ideal asset allocation mix. I'd accomplish this by completing the Int'l funds allocation. Unfortunately, Int'l has climbed since I last checked in and decided to buy in next time a day crash happens. No crash has happened since this point in time, while Asia and Europe have both been zooming upwards.
- Almost 2% of the gain to 10% CAGR came in the form of a decent-sized chunk of corporate dividends.
- Bond funds have *really* kicked into high gear these past couple of months, while equities have tempered a bit.
Obviously, there's another quarter left before all this is over, and a good portion of these gains could vanish from a freak October market crash, or something equally bad. It remains to be seen by year-end what the final CAGR is. I'm surprised, if anything, because I firmly believed it would be a very challenging and difficult goal to reach.
3 comments:
Check out CGM Focus - an open-ended fund run by Ken Heebner - one of the best MF managers in the business. YTD return of 77% as of 10/31/07. I have both a Roth and taxable account. Very high turnover though, best suited for tax-deferred account.
Thanks for the suggestion. I checked out the YTD 77% return on CGMFX. Unfortunately, it's because CGMFX tanked significantly at 2006 year-end. It's a large-cap growth fund-- so it uptrended just as the large-cap growth stocks exploded, possibly with multiple betas to boost gains to be better than large-cap growth stocks in general.
Between year-start 2004 to year-start 2007, the fund really only returned 15% *over that 3-year period.*
Long-term, the fund's trending differs little from the trends of the general large-cap markets, but has been beating the S&P500 and most large-cap growth funds.
Couple all of this with very high turnover (because high turnover equates to someone managing the fund having to do the buying and selling), which means taxable events, and high fees (1.02%), plus the hesitation that its value will drop like a cliff anytime, I would hesitate to buy a share of that fund.
Now, if you happened to get into the fund at the right time, which, really, is the biggest elusive factor in investing, you made out good. Buy at the wrong time, and there were other funds in other categories that outperformed it.
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