2011 results

[ericd1]

Regarding an index for tracking...The simplest measure is the market. And to be fair it should be after dividends and expenses, ie. an investable alternative. Vanguard's index funds and ETFs would be suitable for this. The S&P 500 is VFINX or VOO and Total Stock Market is VTSMX or VTI. Both of these are capitalization-weighted indices heavily favoring large cap stocks.

 

There's lots of other index funds and ETFs to use for comparisons if you invest in primarily in other asset classes. But over the long-term the broad market is a good measuring stick!

 

2011 results---I was down 8.4% last year. A bit disappointed as I was up 10.7% at the end of April. It was a downhill slide from there!

 

Did well with bonds--munis up 21% and high yield up 15%, gains offset with a 15% loss in equities--primarily natural resource, oil & gas, BAC and GE options. On the upside IBM & LVLT helped out. Small trading allocation to cigar butts mostly broke-even.

 

Continuing to hold major positions from last year, but thinking I should invest only in bonds...

 

But then again I missed the 50%+ gain in long term bonds...

[UhuruPeak]

about 20% (I historically have been tracking from March to March to coincide with Tax season; this is the first year I look at year's end).

 

What helped was the huge run-up in Gold/Silver; what hurt was the huge crash in Silver, when I lost probably 40% of my financial assets (in 4 days when silver went from $50 to sub-$40 in early May and leverage bit me hard).  A lot (a lot!) of activity during the last 6 months for a meager 10-12% increase.  All in all a decent absolute performance but terrible investing/trading grade for me!

[Packer16]

For those of you that use IRR how do you normalize the market return for your IRR?  Lets say you have a big inflow at the bottom of the market and your IRR is greater than your simple rate of return how do you develop a market benchmark for your IRR to account for the inflow at the bottom of the market?

 

Packer

[racemize]

For those of you that use IRR how do you normalize the market return for your IRR?  Lets say you have a big inflow at the bottom of the market and your IRR is greater than your simple rate of return how do you develop a market benchmark for your IRR to account for the inflow at the bottom of the market?

 

Packer

 

Perhaps this was naive of me, but I've been comparing it to the S&P TR without adjustment.  I could do what you are suggesting by creating another IRR with a TR index value, but then I would be discounting any timing effects that result from skill, e.g., me choosing to invest at (hopefully) the right time.  Is this not appropriate?

 

Edit: Went and looked at mutual funds in my brokerage accounts, and they are using the TR as the benchmark, so it appears that they are not adjusting either.

[beerbaron]

For those of you that use IRR how do you normalize the market return for your IRR?  Lets say you have a big inflow at the bottom of the market and your IRR is greater than your simple rate of return how do you develop a market benchmark for your IRR to account for the inflow at the bottom of the market?

 

Packer

 

It's a pain to do and I have stopped doing this 2 years ago. What you could do is use IRR and then do a simple return calculation taking into account all the cash influx happened at the beginning of the year. Then, take it somewhere in the middle for your return.

 

Large cash influx influencing IRR will solve itself over time... it's a lot harder to transfer 100k then 1k so as your portfolio grows.

 

Beerbaron

[ERICOPOLY]

Well damn I'm up 20+% now in 2012.  How arbitrary.  Could be higher next week, or gone next week.

[Uccmal]

Well damn I'm up 20+% now in 2012.  How arbitrary.  Could be higher next week, or gone next week.

 

no kidding... up around 15% ytd.  So there you have it kids.