Late Bloomer Wealth

Portfolio Performance Report

Happy Belated 4th of July!

How did your retirement investment portfolio perform at the half-way mark of 2015?

After years of 24/7 chatter about interest rates, the Federal Reserve Board announced that it will raise interest rates by the end of the year. They haven’t yet, but the mere prospect of higher interest rates hit our bond allocation. Our bonds lost value because the interest rates did go up due to market forces (not from a change in policy) and thus our portfolio is down about $40,000 off its intrayear high in April (Bond value discussed in more detail here). It’s not a big deal as we were expecting this for some time. As you will see our YTD portfolio return is up slightly at .3%, a third of a percent gain for the year.

Our portfolio is in the black for one primary reason: The major benchmarks, the DOW Jones Industrial Average (DOW), S&P 500 Index, and the NASDAQ have all hit all time record highs. Dan and I remember vividly when the last time the technology heavy NASDAQ hit the record books, way back in March, 2000–it finally just broke that record during this 2nd Quarter. Still the domestic stock market only had a slight increase, but the international equities soared over 10%.

From the bar chart below, our Vanguard International Explorer (VINEX) returned 10.69%. Below is our fund by fund breakdown on how our portfolio preformed at the stock and bond market close on June 30, 2015.
(Click directly on the charts to enlarge them)
 Q2 2015 Asset Allocation

 

 

To calculate our portfolio performance, we included our distributions and excluded our contributions. Distributions to fund our retirement are not market loses, likewise our contributions are not market gains either. For a calculation that takes into account the full impact of contributions and distributions throughout the year, log on to Bogleheads wiki and download a free Excel SS: https://www.bogleheads.org/wiki/Calculating_personal_returns.

An additional way to evaluate our portfolio (and yours too) is by comparing our return with some other investors who reported their returns on Bogleheads forum and the 403bwise.com. If your portfolio is 100% equities, then your return should be in the neighborhood of 6-8%, assuming 50% in domestic and 50% in international stocks. If you portfolio is 100% bonds, your return should be a slight loss. If you don’t know how your plan is set up and don’t know your return, this is the time to talk with your adviser and find out. We are showing you how we evaluate our portfolio returns using the Morningstar.com online portfolio services (After a free registration, all you have to do is name your portfolio, insert the ticket symbols and the number of shares you own. Each day the portfolio updates automatically according to the market moves for the day. Unfortunately, annuity contracts do not use ticker symbols).


Hope this helps.

Have a great summer!

If you have any questions, please ask.

Best of fortunes, Steve and Dan

 

Our Book Has 85 REVIEWS!

Late Bloomer Millionaires book cover

Steve Schullo and Dan Robertson: Co-authors of Late Bloomer Millionaires. Read the 85 reviews and pick up a copy by clicking on the cover above. If you read our book, please write a review on Amazon. Much appreciated.

If you have written a review, THANK YOU!  Dan and I want to help people understand their investments, be informed and empowered. Don’t get sold an annuity, always buy an investment. Know the difference. It’s never too late!

If you want my FREE new book, Fighting Powerful Interests, go to the home page, scroll down on the right, register for our blog and get your free PDF book.

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It’s a story about how a group of educators knowing nothing about retirement plans and investments and ending up with an awarding winning 457(b) plan with the 2nd largest school district in the country! After reading either book, you will have the skills and knowledge to recognize if your employer’s retirement plan is low-cost and best-in-class investment options or all high cost, low performing annuities from insurance companies. Read my prior blog post when I answer the question, “Is an Insurance Product an Investment?

If needed, you will recognize and hire a fee-only financial adviser with fiduciary responsibility (Garrett Planning Networks or National Association of Personal Financial Advisers). Annuity agents are not fiduciaries, never have been and there any no plans coming from the insurance industry requiring them to be fiduciaries. Avoid them.

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