Author Topic: VTSAX 13%+ gain YTD  (Read 19818 times)

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #50 on: January 04, 2017, 05:42:50 AM »
If the market hadn't dropped the last 3 days, I would have finished in the top 10 (of 610) in the bogleheads market predictor competition. So close!

No clue what will happen in 2017, but after basically giving up on buying any bonds through most of 2016 I finally picked some up when BND was at 80. It seems like everyone is seeing the rosy side of trump "good for business!" right now without the downsides. I have no clue where the S&P 500 will end the year (would personally guess around an 8% gain), but I bet there will be some bumps along the way and it'll be nice having some in bonds to ride that out and potentially buy some dips. Or maybe it will just be up up up and I'll regret the bond buys, but at least got in at 80 instead of 85.

Time to start the 2017 prediction threads!

Money raining from the skies ala 2013 ...

also burning fire of hell ala 2008

dude

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Re: VTSAX 13%+ gain YTD
« Reply #51 on: January 04, 2017, 06:34:05 AM »
If the market hadn't dropped the last 3 days, I would have finished in the top 10 (of 610) in the bogleheads market predictor competition. So close!

No clue what will happen in 2017, but after basically giving up on buying any bonds through most of 2016 I finally picked some up when BND was at 80. It seems like everyone is seeing the rosy side of trump "good for business!" right now without the downsides. I have no clue where the S&P 500 will end the year (would personally guess around an 8% gain), but I bet there will be some bumps along the way and it'll be nice having some in bonds to ride that out and potentially buy some dips. Or maybe it will just be up up up and I'll regret the bond buys, but at least got in at 80 instead of 85.

Time to start the 2017 prediction threads!

JL Collins has an annual market predictions thread, the Louis Rukeyser Memorial Stock Market Predictions (or something like that) contest.  Fun stuff.

Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #52 on: January 04, 2017, 06:57:56 AM »
Overall my asset allocation did approx. 12% return this year with dividends. My guess is 10% in 2017. I'll try and remember this prediction when I calculate my year end stats.

tooqk4u22

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Re: VTSAX 13%+ gain YTD
« Reply #53 on: January 04, 2017, 10:40:46 AM »
I made a similar argument in another thread not too long ago about the CAPE/PE being somewhat skewed currently.  I do still think its high but not as high as it would seem.

Also regarding the Shiller PE one should think about the last 10 years.   Sure the Shiller PE is at 27 right now and the PE is at 25.  But in 2009 when the collapse happened and earnings plummeted (a lot attributed to non-cash charge offs/write downs) the PE spiked.

So as a proxy if you take the average of the last 120 months PE it would currently be 26, but if you simply removed the 10 months with the highest and lowest PE ratios the average PE would drop to 20 - still high but its something to think about when there are very large swings up or down. 

So I don't think that the Shiller PE may not be as high as it really indicates
Classical_liberal denies complicity in stealing concepts from tooqk4u22!  :)  Multiple discovery? or great minds?

I remember awhile back, I ran a P/E10 without the 2009 spike (did a P/E 9, nixing 2009) and it impacted the current ratio by only about 0.5 (this was a few month ago), not too substantial.  I had not thought to remove highest and lowest mo's... very interesting indeed.  Did you just randomly pick 10 mos or cherry pick that for any particular reason?


It is the truncated mean which is meant to middle the data and remove any significant outliers and you take the same number out at top and bottom. The trick is to remove a sufficient amount to smooth the data but not so much/little that it skews it further.  10 months is 8.3% on either end, maybe 12 fro 10% would be better but doubt it would matter much. 

Also of note in the whole situation is the current earnings recession, it ain't pretty. As of June 30th, 12 mo EPS of S&P was only 87.17, from a high of 107.61 only 20 mos earlier.  That type of movement is usually seen in recessions. However, it appears ZIRP may have pushed one off with the very significant Q3 GDP growth revised at 3.2%.  If earnings start to rebound, along with pro-business tax cuts, rising interest rates may not concern investors much.  I second my bullishness!

Keep in mind that the earnings decline is primarily attributed to the energy sector and slightly to materials - both of which are rebounding a bit as the muddy waters clear.  The rest of the market is doing fairly well and financials should start to grow again simply due to rising rates as you say, let alone prospects for a softening in regulation.


VladTheImpaler

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Re: VTSAX 13%+ gain YTD
« Reply #54 on: January 06, 2017, 11:21:40 AM »
So I decided to pull the trigger and buy VTSAX in my Roth IRA at my bank.

But they wanted to charge me a $45 commission/fee... hrmmm I work hard for my money. no.

So I called Vanguard and setup an account today for free.

Anyone else gone through this process?

I supposedly have to print and fill out paperwork and get a signer guarantor...


sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #55 on: January 06, 2017, 11:56:23 AM »
I had to do a notarized signature on some rollovers for my wife (as the consenting spouse), but I've never had to do a signature guarantee/notarization on opening other Vanguard accounts, including personal, rollover [when I was single], UTMA, nor 529.

In any case, it's even worth it just to avoid the $45 BS commission, but I found vanguard extremely easy to work with.

VladTheImpaler

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Re: VTSAX 13%+ gain YTD
« Reply #56 on: January 06, 2017, 05:32:37 PM »
I had to do a notarized signature on some rollovers for my wife (as the consenting spouse), but I've never had to do a signature guarantee/notarization on opening other Vanguard accounts, including personal, rollover [when I was single], UTMA, nor 529.

In any case, it's even worth it just to avoid the $45 BS commission, but I found vanguard extremely easy to work with.

Yeah, I was pleasantly surprised. Great customer service. (No I am not affiliated with Vanguard and I'm not selling anything.)
I bank with USAA and they are also amazing, but since they started opening membership to civilians years ago there has been a gradual change...not for the better. They give the HARD SELL on insurance and in house brokerage products now. The "financial advisors" have tried twice to steer me away from mutual funds from other institutions (Vanguard.) Was pretty disappointed because I used to be their biggest fan.

Metric Mouse

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Re: VTSAX 13%+ gain YTD
« Reply #57 on: January 06, 2017, 05:47:46 PM »
Vanguards service is top notch.

Travis

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Re: VTSAX 13%+ gain YTD
« Reply #58 on: January 06, 2017, 07:53:12 PM »
I had to do a notarized signature on some rollovers for my wife (as the consenting spouse), but I've never had to do a signature guarantee/notarization on opening other Vanguard accounts, including personal, rollover [when I was single], UTMA, nor 529.

In any case, it's even worth it just to avoid the $45 BS commission, but I found vanguard extremely easy to work with.

Yeah, I was pleasantly surprised. Great customer service. (No I am not affiliated with Vanguard and I'm not selling anything.)
I bank with USAA and they are also amazing, but since they started opening membership to civilians years ago there has been a gradual change...not for the better. They give the HARD SELL on insurance and in house brokerage products now. The "financial advisors" have tried twice to steer me away from mutual funds from other institutions (Vanguard.) Was pretty disappointed because I used to be their biggest fan.

At some point USAA decided they needed to play all of the games, not just banking and insurance.  They're terrible (but not the worst) when it comes to their investing business.

fattest_foot

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Re: VTSAX 13%+ gain YTD
« Reply #59 on: January 06, 2017, 09:05:47 PM »
Yeah, I was pleasantly surprised. Great customer service. (No I am not affiliated with Vanguard and I'm not selling anything.)
I bank with USAA and they are also amazing, but since they started opening membership to civilians years ago there has been a gradual change...not for the better. They give the HARD SELL on insurance and in house brokerage products now. The "financial advisors" have tried twice to steer me away from mutual funds from other institutions (Vanguard.) Was pretty disappointed because I used to be their biggest fan.

This is completely unrelated to this thread, but USAA annoyed me a great deal last year. We had our auto insurance, renters insurance, and a checking account with them. We bought a house and found that State Farm would save us about $10 a month over what USAA offered, between house and auto insurance combined.

They gave me all sorts of grief about how I shouldn't leave them over "just" $10 (if it's just $10, why USAA couldn't match it?). Worse, they gave me some kind of guilt trip about how they were so awesome and that "I may not be able to get covered by USAA in the future" (ignoring that we still have a checking account, and I'm a veteran; oh, and we'd been customers for over a decade). Left a VERY sour taste in my mouth.

sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #60 on: January 06, 2017, 09:10:07 PM »
I'm a ~30 year customer of USAA and think their insurance and banking products are top-notch. Very good customer service and I wouldn't leave them over $10/year for sure. (That's just me, though I understand different people have different priorities and sometimes it's a principle thing. I stopped using a company I really liked over a matter that was $0.71 economically.)

That said, their investment and brokerage products are absolutely terrible. Pricing is not competitive. Web UI seems like a poorly skinned mainframe application. Policies are inflexible. Systems are slow. And did I mention that pricing wasn't competitive? I used them for a short while with some 401K rollovers, but moved all that out.

WackyTomato

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Re: VTSAX 13%+ gain YTD
« Reply #61 on: January 06, 2017, 10:45:55 PM »
OP to be honest this year has been very good for equities.  To be fair, most index funds will have comparable results.

zazpowered

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Re: VTSAX 13%+ gain YTD
« Reply #62 on: January 07, 2017, 01:30:35 AM »
My portfolio of individual stocks almost doubled that performance but I want to start putting some money into VTSAX for less risk

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #63 on: January 07, 2017, 04:02:46 AM »
OP to be honest this year has been very good for equities.  To be fair, most index funds will have comparable results.

Very incorrect statement. Small caps and mid caps greatly outperformed the total us market and foreign lagged.

CanuckExpat

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Re: VTSAX 13%+ gain YTD
« Reply #64 on: January 07, 2017, 10:54:44 PM »
A nice chart, though doesn't break up as much as you could Investment Returns By Asset Class, 2016 Year-End Review



BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #65 on: January 08, 2017, 07:56:22 AM »
OP to be honest this year has been very good for equities.  To be fair, most index funds will have comparable results.

 Stocks in general have done well. I was just celebrating that fact.
I also have a large chunk of my money in VTSAX, that is why I referenced it.
 I went back and checked VTSAX over the 8 years (Obama's term) it is up 58% or 7.25% per year.
I thought it was going to be higher.
  I only have my networth recorded from 12-31-10 to 12-31-16, I almost have a double,
1.94 multiple, in those 6 years. (growth plus savings)
 I also noted during the 6 years VTSAX is up 56.5%, we had a trough in VTSAX's prices
during 08 and 09.

CanuckExpat

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Re: VTSAX 13%+ gain YTD
« Reply #66 on: January 08, 2017, 08:20:38 AM »
Here is more complete data for 2016 taken from https://www.portfoliovisualizer.com/historical-asset-class-returns:

Inflation                       2.04%

US Stock Market                 12.53%
US Large Cap                    11.82%
US Large Cap Value              16.75%
US Large Cap Growth             5.99%
US Mid Cap                      11.07%
US Mid Cap Value                15.11%
US Mid Cap Growth               6.62%
US Small Cap                    18.17%
US Small Cap Value              24.65%
US Small Cap Growth             10.61%
US Micro Cap                    21.47%

Intl Stock Market               4.65%
Developed Markets               2.45%
International Small Cap         4.17%
International Value             5.05%
European Stocks                 -0.80%
Pacific Stocks                  5.19%
Emerging Markets                11.55%

Cash                            0.20%
Short Term Treasury             1.09%
Intermediate Term Treasury      1.19%
10-year Treasury                1.00%
Long Term Treasury              1.21%
Total Bond Market               2.50%
TIPS                            4.52%
Global Bonds (Unhedged)         4.02%
Global Bonds (USD Hedged)       6.07%
Short-Term Investment Grade     2.75%
Corporate Bonds                 6.21%
Long-Term Corporate Bonds       7.83%
High Yield Corporate Bonds      11.21%
Short-Term Tax-Exempt           0.36%
Intermediate-Term Tax-Exempt    0.09%
Long-Term Tax-Exempt            0.62%

REIT                            8.34%
Gold                            8.03%
Precious Metals                 50.64%
Commodities                     10.12%
« Last Edit: January 09, 2017, 09:37:59 AM by CanuckExpat »

OurTown

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Re: VTSAX 13%+ gain YTD
« Reply #67 on: January 09, 2017, 08:29:44 AM »
Here is more complete data taken from https://www.portfoliovisualizer.com/historical-asset-class-returns:

Inflation                       2.04%

US Stock Market                 12.53%
US Large Cap                    11.82%
US Large Cap Value              16.75%
US Large Cap Growth             5.99%
US Mid Cap                      11.07%
US Mid Cap Value                15.11%
US Mid Cap Growth               6.62%
US Small Cap                    18.17%
US Small Cap Value              24.65%
US Small Cap Growth             10.61%
US Micro Cap                    21.47%

Intl Stock Market               4.65%
Developed Markets               2.45%
International Small Cap         4.17%
International Value             5.05%
European Stocks                 -0.80%
Pacific Stocks                  5.19%
Emerging Markets                11.55%

Cash                            0.20%
Short Term Treasury             1.09%
Intermediate Term Treasury      1.19%
10-year Treasury                1.00%
Long Term Treasury              1.21%
Total Bond Market               2.50%
TIPS                            4.52%
Global Bonds (Unhedged)         4.02%
Global Bonds (USD Hedged)       6.07%
Short-Term Investment Grade     2.75%
Corporate Bonds                 6.21%
Long-Term Corporate Bonds       7.83%
High Yield Corporate Bonds      11.21%
Short-Term Tax-Exempt           0.36%
Intermediate-Term Tax-Exempt    0.09%
Long-Term Tax-Exempt            0.62%

REIT                            8.34%
Gold                            8.03%
Precious Metals                 50.64%
Commodities                     10.12%


Data for 2016.  Go back in time and look at prior years, esp. 2008!

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #68 on: January 09, 2017, 08:41:24 AM »
Here is more complete data taken from https://www.portfoliovisualizer.com/historical-asset-class-returns:

Snip


Data for 2016.  Go back in time and look at prior years, esp. 2008!

whats your point with this statement.  canuck was providing data of individual sections of the market per the conversation going on that VTI performed the best.

Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #69 on: January 09, 2017, 08:44:44 AM »
Go back in time and look at prior years, esp. 2008!

Hey if you are going back in time can you send me an email with the last few years of market data? ;)

OurTown

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Re: VTSAX 13%+ gain YTD
« Reply #70 on: January 09, 2017, 09:30:27 AM »
Not being critical at all, just clarifying it's 2016 data.

BlueMR2

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Re: VTSAX 13%+ gain YTD
« Reply #71 on: January 09, 2017, 10:03:05 AM »
I guess I have all the wrong international and emerging market funds...  They're *down* 4%...  Luckily I'm not too heavy in them...

Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #72 on: January 09, 2017, 10:10:44 AM »
I guess I have all the wrong international and emerging market funds...  They're *down* 4%...  Luckily I'm not too heavy in them...

What funds do you have?

dougules

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Re: VTSAX 13%+ gain YTD
« Reply #73 on: January 09, 2017, 10:26:09 AM »
I guess I have all the wrong international and emerging market funds...  They're *down* 4%...  Luckily I'm not too heavy in them...

Why are they the wrong funds?  High expense ratio? 

International markets haven't been doing that well lately, but that's how it goes.  I'm sure the script will flip at some point.  Past performance is not indicative of future results. 


Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #74 on: January 09, 2017, 10:43:03 AM »
Why are they the wrong funds? 

BlueMR2 was commenting on his funds' performance relative to the metrics posted above my CannuckExpat.

Ryland

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Re: VTSAX 13%+ gain YTD
« Reply #75 on: January 09, 2017, 06:14:09 PM »
Post FIRE: Yay! Keep going up!
Pre FIRE: Ahhhhh!!! Pray for a massive, massive drop!

Two sides to every coin in this zero sum game! :)

CanuckExpat

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Re: VTSAX 13%+ gain YTD
« Reply #76 on: January 12, 2017, 12:42:21 AM »
Not being critical at all, just clarifying it's 2016 data.

I modified that original post of mine, in case it was confusing that it was or wasn't 2016 data. I certainly don't think any one should expect returns like that all the time, or invest only in only in commodities :)

Though speaking of going back in time to 2008:
If you invested $10,000 in a balanced fund on January 1st 2008, you'd have $15,544 today.
If you invested $10,000 in a balanced fund on January 1st 2009, you'd have $23,753 today.

Obviously, I'd rather have the second return, but even the first isn't too shabby. I took those numbers from here, which I think is a good illustration of how it all evens out in the end.

It's fun to talk about year end returns and how individual asset classes did, but in practice I have an asset allocation that I'm comfortable with and that more or less resembles the total stock market at least (with a slight small value tilt and extra REIT allocation), we just invest(ed) regularly as we have cash and hope the markets do their work.

I guess I have all the wrong international and emerging market funds...  They're *down* 4%...  Luckily I'm not too heavy in them...

Are your returns in USD or another currency?
If I'm reading correctly, the benchmarks for the data I posted are:
Vanguard Total International Stock Index Fund (VGTSX)
Vanguard Emerging Markets Stock Index Fund (VEIEX)
« Last Edit: January 12, 2017, 07:33:15 PM by CanuckExpat »

sol

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Re: VTSAX 13%+ gain YTD
« Reply #77 on: January 12, 2017, 11:27:45 AM »
I have an asset allocation that I'm comfortable with and that more or less resembles the total market (with a slight small value tilt and extra REIT allocation)

Choosing an asset allocation is not as easy as most people believe.  If you are an indexer, are you proportional to the stock market, the stock and bond market, the stock and bond and private equity market, the stock and bond and PE and real estate market, or some subset of those plus maybe gold or currencies?  Are you cap weighted or price weighted in each of those?

People think indexing protects them by making everything simple.  People don't know how much they don't know about what they don't know.

The global real estate market alone is approximately 60% of all global wealth, but very few of us are invested 60% in real estate. And for good reasons.  Most of us are vastly overweighted in publicly traded American companies.

sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #78 on: January 12, 2017, 11:33:19 AM »
The global real estate market alone is approximately 60% of all global wealth, but very few of us are invested 60% in real estate. And for good reasons.  Most of us are vastly overweighted in publicly traded American companies.
A lot of homeowners are vastly overweight real estate (more than 60% asset allocation to RE).

If you have a $250K home, $50K of equity in it and a total net worth of $417K, you are 60% invested in real estate (IMO).

On an asset value basis, I'm almost 50% invested in real estate, despite having significant non-real estate holdings.

2Birds1Stone

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Re: VTSAX 13%+ gain YTD
« Reply #79 on: January 12, 2017, 12:04:04 PM »
The global real estate market alone is approximately 60% of all global wealth, but very few of us are invested 60% in real estate. And for good reasons.  Most of us are vastly overweighted in publicly traded American companies.
A lot of homeowners are vastly overweight real estate (more than 60% asset allocation to RE).

If you have a $250K home, $50K of equity in it and a total net worth of $417K, you are 60% invested in real estate (IMO).

On an asset value basis, I'm almost 50% invested in real estate, despite having significant non-real estate holdings.

This is a very interesting concept, and one I have never considered.

So, for someone like myself who currently rents and has a combined (with my SO) net worth of ~$300k, if we were to purchase a $300k home we would automatically be invested 50% in real estate?

It makes sense from an asset value standpoint, would a similar concept apply to a leveraged ETF?

sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #80 on: January 12, 2017, 12:36:50 PM »
From a VAR (value-at-risk) standpoint, I'd treat a 3x levered S&P 500 product as having 3x the exposure of the net asset value.

There may be a different formal VAR treatment of that product, but that's probably pretty close. If you have $100K face value 3x levered holding and the underlying asset goes up (or down) 10%, your gain (or loss) is $30K, not $10K, so I think it's reasonable to treat your position from an unlevered asset allocation perspective at $300K NAV.

2Birds1Stone

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Re: VTSAX 13%+ gain YTD
« Reply #81 on: January 12, 2017, 01:44:06 PM »
From a VAR (value-at-risk) standpoint, I'd treat a 3x levered S&P 500 product as having 3x the exposure of the net asset value.

There may be a different formal VAR treatment of that product, but that's probably pretty close. If you have $100K face value 3x levered holding and the underlying asset goes up (or down) 10%, your gain (or loss) is $30K, not $10K, so I think it's reasonable to treat your position from an unlevered asset allocation perspective at $300K NAV.

This is very interesting stuff. If you don't mind me asking, where did you learn about this stuff?

fattest_foot

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Re: VTSAX 13%+ gain YTD
« Reply #82 on: January 12, 2017, 01:48:15 PM »
A lot of homeowners are vastly overweight real estate (more than 60% asset allocation to RE).

If you have a $250K home, $50K of equity in it and a total net worth of $417K, you are 60% invested in real estate (IMO).

On an asset value basis, I'm almost 50% invested in real estate, despite having significant non-real estate holdings.

This is a very interesting concept, and one I have never considered.

So, for someone like myself who currently rents and has a combined (with my SO) net worth of ~$300k, if we were to purchase a $300k home we would automatically be invested 50% in real estate?

It makes sense from an asset value standpoint, would a similar concept apply to a leveraged ETF?

I always look at it the opposite of sokoloff; only the equity that you have in your house (or better, difference between mortgage remaining and fair market value) is what you count in your net worth.

Saying someone has $50k in home equity on a $250k house, and $417k net worth, I'd assume they have $367k in some other sort of investment. Maybe it's because of accounting classes, but you have to still consider debt (the mortgage) in your net worth calculations.

Edit: Seeing sokoloff's 2nd response to that, it seems like he's talking about considering the house as a leveraged asset. But that only makes sense is you're actually leveraging it; so doing something like taking out a HELOC and investing that.
« Last Edit: January 12, 2017, 01:51:24 PM by fattest_foot »

BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #83 on: January 12, 2017, 01:51:09 PM »
Not being critical at all, just clarifying it's 2016 data.

I modified that original post of mine, in case it was confusing that it was or wasn't 2016 data. I certainly don't think any one should expect returns like that all the time, or invest only in only in commodities :)

Though speaking of going back in time to 2008:
If you invested $10,000 in a balanced fund on January 1st 2008, you'd have $15,544 today.
If you invested $10,000 in a balanced fund on January 1st 2009, you'd have $23,753 today.

 Or, on May 13 2008, you could have had $393,000 in VTSAX.
and then on Feb. 28, 2009 you only had $235,000 in VTSAX.
 But, as would be expected the balance is a lot higher now!
« Last Edit: January 12, 2017, 01:54:33 PM by Qmavam »

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Re: VTSAX 13%+ gain YTD
« Reply #84 on: January 12, 2017, 01:51:17 PM »

I always look at it the opposite of sokoloff; only the equity that you have in your house (or better, difference between mortgage remaining and fair market value) is what you count in your net worth.

Saying someone has $50k in home equity on a $250k house, and $417k net worth, I'd assume they have $367k in some other sort of investment. Maybe it's because of accounting classes, but you have to still consider debt (the mortgage) in your net worth calculations.

While I understand and agree with you in terms of net worth calculation, I think sokoloff's explanation is more in terms of your asset allocation or asset exposure. His explanation makes a lot of sense. If you have a $250k house with $50k equity and there is a RE crash and your house is suddenly worth $125k, you took a $125k bath regardless of your equity.

Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #85 on: January 12, 2017, 01:54:00 PM »
Edit: Seeing sokoloff's 2nd response to that, it seems like he's talking about considering the house as a leveraged asset. But that only makes sense is you're actually leveraging it; so doing something like taking out a HELOC and investing that.

Unless you own the house you are leveraged with a mortgage.

fattest_foot

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Re: VTSAX 13%+ gain YTD
« Reply #86 on: January 12, 2017, 01:55:31 PM »

I always look at it the opposite of sokoloff; only the equity that you have in your house (or better, difference between mortgage remaining and fair market value) is what you count in your net worth.

Saying someone has $50k in home equity on a $250k house, and $417k net worth, I'd assume they have $367k in some other sort of investment. Maybe it's because of accounting classes, but you have to still consider debt (the mortgage) in your net worth calculations.

While I understand and agree with you in terms of net worth calculation, I think sokoloff's explanation is more in terms of your asset allocation or asset exposure. His explanation makes a lot of sense. If you have a $250k house with $50k equity and there is a RE crash and your house is suddenly worth $125k, you took a $125k bath regardless of your equity.

I suppose that's sort of true, but you only really took a loss of $75k in that scenario.

So I guess what I'm trying to say is that I would only use what I consider "net worth" (as I said above, this would be fair market value minus remaining mortgage) as a consideration on what to include in "assets." Since the discussion was about asset allocation, that makes the most sense to me. Including the entire mortgage value while ignoring the debt portion doesn't give an accurate reflection of what your total holdings are, since you can't liquidate something you don't own (make the mortgage vanish).

sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #87 on: January 12, 2017, 01:58:10 PM »
This is very interesting stuff. If you don't mind me asking, where did you learn about this stuff?
I worked for two different Wall St firms in the past (D. E. Shaw & Co [a hedge fund] and Merrill Lynch). I wasn't on the quant side, but rather on the software side.

That's probably half of my background in finance; the other half is taking a personal interest in my personal finances, reading voraciously, and applying my educational background in engineering to finance.

sol

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Re: VTSAX 13%+ gain YTD
« Reply #88 on: January 12, 2017, 02:00:17 PM »


Right, this is just like deciding if you are price weighted or cap weighted in your stock index.  They are different ways to count up these numbers to determine what you think is the right amount if exposure to have, and I don't know that one way is definitely better than the other for determining your asset allocation.  That's up to you, and saying "I just buy the index" doesn't make it any easier.

weirdlair

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Re: VTSAX 13%+ gain YTD
« Reply #89 on: January 12, 2017, 02:48:39 PM »
Didn't we have a bunch of 2016 market prediction threads?  I definitely remember taking bets.  Can anyone find those buried in the forum archives?

Mr Percentage started this prediction thread in early April '16 and the thread ended in mid-July '16: Here it comes--Red Dow

CanuckExpat

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Re: VTSAX 13%+ gain YTD
« Reply #90 on: January 12, 2017, 07:37:37 PM »
Of course Sol, you make a good point, picking your appropriate asset allocation is a challenge, or perhaps an abritrary guessing game. When I had meant I approximate the total market, I meant only for equities.

The global bond market is roughly twice the size of the global equities market if I recall correctly, but I am not 66% bonds and 33% equities :)

I don't have any fundamental reason to support market cap weighting of equities, except it's cheap and easy and the products that do it are there.
I have enough concerns about market cap weighting that I tilt to value and size partially for that reason. But I don't think anybody should take my advice, I just picked an allocation a long time ago, and no I'm happy to stick to it.

CanuckExpat

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Re: VTSAX 13%+ gain YTD
« Reply #91 on: January 03, 2018, 08:14:13 PM »
A nice chart, though doesn't break up as much as you could Investment Returns By Asset Class, 2016 Year-End Review




Bumping this old thread, here is the equivalent asset class returns for 2017 (source):

Note much different axes

Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #92 on: January 03, 2018, 09:04:45 PM »
Overall my asset allocation did approx. 12% return this year with dividends. My guess is 10% in 2017. I'll try and remember this prediction when I calculate my year end stats.

My AA did a little over 13% this year so similar to last year and better than I predicted.
« Last Edit: January 03, 2018, 09:07:59 PM by Retire-Canada »

Fomerly known as something

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Re: VTSAX 13%+ gain YTD
« Reply #93 on: January 04, 2018, 05:16:27 AM »
I had to do a notarized signature on some rollovers for my wife (as the consenting spouse), but I've never had to do a signature guarantee/notarization on opening other Vanguard accounts, including personal, rollover [when I was single], UTMA, nor 529.

In any case, it's even worth it just to avoid the $45 BS commission, but I found vanguard extremely easy to work with.

Yeah, I was pleasantly surprised. Great customer service. (No I am not affiliated with Vanguard and I'm not selling anything.)
I bank with USAA and they are also amazing, but since they started opening membership to civilians years ago there has been a gradual change...not for the better. They give the HARD SELL on insurance and in house brokerage products now. The "financial advisors" have tried twice to steer me away from mutual funds from other institutions (Vanguard.) Was pretty disappointed because I used to be their biggest fan.

An insurance guy at USAA taught me how to avoid the $45 fee on vanguard funds, you have to set it up as a monthly investment vs a flat purchase.  That being said, I funded my IRA at Vanguard directly this year. 

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #94 on: January 04, 2018, 07:05:37 AM »
Overall my asset allocation did approx. 12% return this year with dividends. My guess is 10% in 2017. I'll try and remember this prediction when I calculate my year end stats.

My AA did a little over 13% this year so similar to last year and better than I predicted.

dang what is your AA - i thought you were heavy stocks which as the chart above shows did amazingly well across the board. 20+%

radram

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Re: VTSAX 13%+ gain YTD
« Reply #95 on: January 04, 2018, 07:17:50 AM »
I had to do a notarized signature on some rollovers for my wife (as the consenting spouse), but I've never had to do a signature guarantee/notarization on opening other Vanguard accounts, including personal, rollover [when I was single], UTMA, nor 529.

In any case, it's even worth it just to avoid the $45 BS commission, but I found vanguard extremely easy to work with.

Just call Vanguard. We just dealt with this issue last week. Signature requirements come from the company you are transferring FROM, even though the paperwork still has the space for them. Vanguard has a list of institutions that require the signature guarantee.

Vanguard told us the guarantee was not needed. It was worth a phone call.

Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #96 on: January 04, 2018, 07:34:03 AM »
dang what is your AA - i thought you were heavy stocks which as the chart above shows did amazingly well across the board. 20+%



I'm 100% stocks, but I live in Canada and the Canadian dollar gained a lot of value this year.

As an example:

VUN [US Total Market in CDN$] = 13.3%
VTI [US Total Market in USD$] = 21.2%

Same underlying investments, but different returns due to currency fluctuations.

Now this isn't all bad as that means:

1. my portfolio in CAD$ is worth more than the same dollar amount was in Jan 2017.
2. 1 CAD$ will buy more imported goods/services, which in Canada is most stuff.
3. I travel a lot in the US so again a strong CAD is useful.
4. eventually the CAD will drop again [say 7%] and when it does it will add that 7% to non-Canadian returns.

CND stocks only did 8.4% this year, but in 2016 they did over 21% when US stocks were lower so the different performance provides some diversification which reduces volatility.

Just part of life living in the Great White North.
« Last Edit: January 04, 2018, 12:13:51 PM by Retire-Canada »

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #97 on: January 04, 2018, 12:11:10 PM »
Iterating makes sense

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Re: VTSAX 13%+ gain YTD
« Reply #98 on: January 04, 2018, 12:47:55 PM »
Love the bar graphs, CanuckExpat. I remember getting annoyed at the total International index fund a year or two ago . . . . glad I just stayed the course!

sol

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Re: VTSAX 13%+ gain YTD
« Reply #99 on: January 04, 2018, 01:03:36 PM »
How many years in a row does the market have to climb ~20% before people stop fearing the next market correction? 

The past nine years have been a modern economic miracle.  Whatever little hiccups come next seems likely to be inconsequential in comparison. 

Like at this point I feel we could mostly shrug off the type of 40% correction that has always previously sparked serious discussion about the end of capitalism and collapse of western society.  Go ahead, take me back to 2015 valuations.  No biggie.