Hi,
We have not provided an update to our portfolio since we published our book 1.5 years ago. In the last two years, our portfolio has performed so well, we finished remodeling our house with new AC and a master bath and our portfolio has remained the same!
Our purpose now is to show how to evaluate a portfolio’s performance with the overall stock and bond market. We also want to model a broadly diversified portfolio using low-cost index stock and bond funds.
Below are two tables and a pie chart. The first table shows the overall broad domestic stock and bond asset classes’ performance year-to-day (YTD), data needed to compare how our portfolio is performing.
The 2nd table shows our portfolio and the individual investments’ YTD performance, the cost and the name of the index or fund. We got this information using the Morningstar.com portfolio feature. Its a great and simple way to monitor your portfolio’s performance for each investment and does all the work I needed to make this report. I am no mathematician, but M* makes me look good.
Finally, the pie chart shows our overall allocation between stocks and bonds. To balance risk and return appropriate to our ages, Dan and I need to keep tabs on the important stock/bond split.
By looking at the broad market results in the first table and compare it with our individual returns on the second table, you can tell quickly that our portfolio is performing about the same as the overall stock and bond market. That’s good. (Notice the very low Vanguard costs of our investments in 2nd table below).
QUESTION Below:
QUESTION
Because we withdrew a large amount of money from our bond allocation to purchase our Tesla (click here), our portfolio is slightly off balance from our original 30% stock / 70% bond allocation. We now have a 38% allocation to stocks and we need to lower than allocation to about 30%.
Which stock funds would you suggest that we sell and which bonds would you suggest we buy to rebalance the portfolio back to the 30/70 stock bond split?
Read the Bogleheads responses to my question. Its great and hilarious because it gets into the emotions of investing MY EMOTIONS: click here. 🙂
Note: Because we are retired at ages 67 and 73, we choose the 30/70 split. This split is conservative and is not appropriate for younger investors who should have a much higher allocation to stocks.