Late Bloomer Wealth

Welcome to Our New Website! Market Update: See How Our Portfolio Did During Current Market Crash.

What a month! In the wake of the broad equity stock markets blowing up, Dan and I are excited to present our new website. After 2.5 years, it was time to upgrade our web presence from a blog to a website. All of our past articles are still available.

In case you missed it, the most popular article in the last 2.5 years was about a reader’s experience with trying to find professional help: Garrett Planning Network. It has a happy ending.

How is everybody holding up? As we all know August was not a good month for the stock market and our portfolios. The broad market is down 2,200 points off its high set last May, 2015 (see our portfolio below).

With all of the talk about China, interest rate hikes, jobs report, oil prices, etc, this market has been up and down, mostly down for the last couple of weeks. It’s short term and noisy.

Are you ignoring the noise? Or making changes? I checked our porftolio’s stock bond split and it has not changed enough to rebalance.

As of the September 4, 2015 close, our portfolio is down -2.3% YTD.

Calculated our return by this simple formula: year-to-date-value minus beginning-of-the-year-value divided by the beginning-of-year-value. (Take out contributions and put back distributions to isolate the stock and bond market return. Contributions are mistaken for higher returns (the famous Beardstown Ladies made that mistake and their reputation was condemned and the book publisher sued) and distributions are mistaken for market loses). Bogleheads wiki has an excel program that will include monthly contributions and distributions for those who want a precise YTD return.

Here are the numbers for the Market close September 4, 2015:

  • Dow -272.4 16,102.4
  • Nasdaq -49.6 4,683.9
  • S&P` -29.9 1,921.2

Steve and Dan’s specific portfolio funds YTD Return:

The surprising result is Vanguard’s Explorer with a 3.22% return YTD.

           Name                                                     Total Return YTD    

  1. Vanguard FTSE All-World ex-US Index:       -6.92                         
  2. Vanguard Total Stock Market ETF:            -5.03
  3. Vanguard Wellington:                                     -4.03
  4. Vanguard Extended Market Idx:                 -3.37
  5. Vanguard Wellesley® Income:                    -2.03
  6. Vanguard Prime Money Market:                  0.01
  7. Vanguard Total Intl Bd Idx:                           0.42
  8. Vanguard Total Bond Market Index Adm:  0.76
  9. Vanguard GNMA:                                                1.1
  10. Vanguard Short-Term Bond Index:             1.3
  11. Vanguard Interm-Term Invmt-Grade:       1.34
  12. Vanguard Interm-Term Treasury Adm:    2.11
  13. Vanguard International Explorer:              3.22

Q2 2015 Asset Allocation

Around the Web. Articles about this current “bear” “correction” or “crash” market.

Boglehead Larry Swedroe has his view: http://www.etf.com/sections/index-investor-corner/swedroe-riding-out-volatility?nopaging=1

Boglehead Mike Piper found several great articles on this market crash: http://www.obliviousinvestor.com/investing-blog-roundup-responding-to-stock-market-volatility/

Financial reporter Dan Solin’s has his view on handling yourself during bear markets: http://www.huffingtonpost.com/dan-solin/the-secret-to-investing-i_b_8133392.html

The best advice during these turbulent times is to listen to Jack Bogle.  His advice to investors—”don’t do anything right now.” “It’s just speculators not speculating on what they think is going to happen, but what they think other speculators think is going to happen,” the founder of the Vanguard Group said in an interview with CNBC’s. He believes this sell off came from nothing important. Dan and I agree. We have not changed a thing. http://www.cnbc.com/2015/08/28/jack-bogle-how-to-handle-the-markets-wild-ride.html

Dan and I have a 35% Equity/65% Bond portfolio for over ten years. Bogle has advocated a more aggressive balanced portfolio of about 50-50 for a long time. We think Mr. Bogle would be proud of our portfolio.

Dan and I are in good company. Take a look at the hundreds of YTD returns on similar broadly diversified, low-cost portfolios from the Boglehead forum: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=145610&start=500

What do you think?

 

 

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