Archives for April 2013

Swensen Portfolio 10-Year Trailing Returns Redux

April 11, 2013 By Jonathan Ping 1 Comment
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Here is a check-in on the trailing 10-year total returns for the David Swensen model portfolio, courtesy of ETFPM.com. Last update was in 2011. As a reminder, here is the model portfolio asset allocation with representative ETFs:

30% Domestic US Equity (VTI)
15% Foreign Developed Equity (VEA)
10% Emerging Markets (VWO)
15% Real Estate (VNQ)
15% U.S. Treasury Bonds (IEF)
15% Inflation-Protected Securities (TIP)

The chart below shows the growth of $1,000 invested this way and rebalanced annually (eMAC), starting from January 2003 until the end of March 2013. eMAC stands for “efficent multi-asset class”.

Again, we see that this low-cost, diversified index fund portfolio (+169%) has done well over the last 10.3 years, besting the S&P 500 (+118%) handily as well as the Dow Jones Credit Suisse Hedge Fund Index (not shown anymore, but +95% roughly). We also see that a 30% Stock, 70% Long-term Treasury bond portfolio does pretty well, but I tend to dismiss that as rearview-mirror investing. Yes, looking backward it did well, but I doubt you could find any portfolio manager telling their clients to hold 30% Stocks and 70% Long-Term Treasuries as a long-term portfolio during the period between 2003-2007.

Filed Under: Investing
Last updated: April 11, 2013
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Total Economy Portfolio: Adding Small Value Stock, REIT Exposure

April 10, 2013 By Jonathan Ping 2 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

In many investing books such as David Swensen’s Unconventional Success or Bill Schultheis’ The Coffeehouse Investor, you may see model portfolios that include an allocation to smaller companies and/or real estate investment trusts (REITs). Historically, adding these less-correlated asset classes have improved a portfolio’s overall return while reducing volatility. Author and portfolio manager Rick Ferri proposes another lens from which to view why such additions add value in his Forbes article called The Total Economy Portfolio.

Briefly, Ferri points out that the number of publicly traded companies has fallen by over 50% in the last 16 years, and those public companies together earn only about half of the U.S. economy’s profits. What is missing, and what should we do to replace them?

The two main areas of the economy that are underrepresented on the stock market are small businesses and commercial real estate. That means increasing small company and real estate exposure in your portfolio should help you track the economy better. […] My “Economic Tilt Portfolio” is allocated 65% to the Wilshire 5000, 25% to the Russell 2000 small-cap value index and 10% to the Dow Jones U.S. Select Real Estate Investment Trust index.

The chart from the article below compares the total return of the Total US Stock Market (Wilshire 5000) vs. the Economic Tilt Portfolio:

[Read more…]

Filed Under: Investing
Last updated: April 25, 2019
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Paying Cash For Cars: Edmunds.com $3,500 Debt-Free Car Project

April 9, 2013 By Jonathan Ping 21 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Car pricing website Edmunds.com just finished up a year-long series called the Debt-Free Car project.

Their goal was to explore an alternative to “Buy Here, Pay Here” car lots, which target lower-income folks with poor credit. These lots usually sell a 5-10 year-old car for a high total cost by combining a low down payment and a long stream “affordable” monthly payments. Think of them as the payday loans and rent-to-own TV and furniture stores of the car world.

With an initial budget of $3,500 and the simple criteria of a reliable brand car with an odometer under 165,000 miles, they eventually settled on a 1996 Lexus ES 300 sedan with 135,000 miles that cost roughly $3,300 ($3,800 including tax, title, and fees). They took the average monthly payment of a “deep subprime” borrower of $365 (per Experian) and made that their maintenance budget.

Over the next 13 months, they drove that 16-year-old Lexus another 18,000 miles and spent $3,286 in repairs and maintenance. This included both preventative maintenance things like new tires, new battery, oil changes, etc. as well as two breakdowns and other unexpected repairs. This worked out to $253 per month, under their maintenance budget but high when compared to the purchase price. On the other hand, many of the repairs won’t be repeated for a while and 18,000 miles is higher than average. They ended the experiment by selling the car to an Edmunds employee for $2,700, although they probably would have gotten more on the open market.

Overall, I think this was a neat experiment, and definitely worth a read. The $3,500 + 16-year-old car is lower than my sweet spot of around $8,000-$10,000 + under 7-year-old car, as I’d trade faster deprecation for fewer repairs. Still, the idea of paying cash for a car definitely fits in with my car affordability rule-of-thumb. If you stop thinking of affordability in terms of monthly payments, you can save a lot of money.

You’ll also need to find a good independent mechanic, as the NY Times points out. Recently, I’ve found Yelp to be very helpful in this regard, although some good places have gotten really overbooked. For many years pre-Yelp, I was a loyal customer of Art’s Automotive in the East Bay of the San Francisco Bay Area (Japanese brands only).

Filed Under: Frugal Living
Last updated: April 9, 2013
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

$10,000 P2P LendingClub & Prosper Loan Portfolio Update – April 2013

April 8, 2013 By Jonathan Ping 4 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Here’s the April 2013 update for my peer-to-peer lending portfolio, the last of three “real money” portfolios being tracked monthly as part of my Beat the Market Experiment. See also the $10,000 Benchmark and $10,000 Speculative portfolio updates.

For this one, I started with $10,000 split evenly between Prosper Lending and Lending Club, and went to work lending other people money and earning interest with an 8% target net return. So it’s also a race-within-a-race to see which option offers the best returns.

$5,000 LendingClub Loan Portfolio. Below is a screenshot of my LendingClub account as of 4/1/13. I’ve had loans at LC before, but sold them all on the secondary market and started fresh for this tracking experiment. Here are screenshots of my total balance and my portfolio details. I would say my overall risk level is moderate-conservative with mostly A and B rated loans (top two grades).


(click to enlarge)

The portfolio is now 5 months old, with 208 currently active loans, 9 loans that were paid off early, and 5 in funding. Two of the active loans are currently between 31-120 days late, which according to LendingClub have a 53% recovery rate overall. But to be conservative I will now assume the remaining $48 in principal to be completely lost. The current weighted average interest rate is reported as 12.33%, which will hopefully offer enough cushion to still net an 8% return.

I pick loans using a preset filter based on my LendingClub filters post as well as my Prosper filter research noted below. I never spend any time reading individual loan descriptions, keeping it passive and scalable. The filters are saved online and it takes just a minute to reinvest interest, although I still tend to forget until I do these updates. In addition to outstanding loan principal, the account also has $37.02 in idle cash, $125 in funding limbo, and $40.39 in accrued interest.

LendingClub.com account value: $5,161 (includes principal + accrued interest, minus 30+ day lates, after fees)

$5,000 Prosper.com Loan Portfolio. Below are screenshots of my Prosper account page as of 4/1/13.

[Read more…]

Filed Under: Investing, Monthly Updates
Last updated: August 2, 2017
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

We Paid Off Our Mortgage: History and Commentary

April 7, 2013 By Jonathan Ping 67 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

We paid off our mortgage. We contacted Provident Funding and requested the full amount due including any accrued interest, the money was sent via bank wire, and the loan is recorded as paid in full. As you might imagine, I spent many hours contemplating this move. In a somewhat anticlimactic fashion, the letter below warning us we had to pay the property taxes ourselves was the first physical acknowledgement of the occasion. I found it amusing that it was addressed “Dear Homeowner”, as I never really felt like I owned my home until now.

A bit of history. When we first bought our home, we looked at the common rules of thumb regarding house affordability and ended up paying 20% down with a initial mortgage less than 3 times our combined income. Indeed, we qualified for the mortgage on my wife’s documented income alone. We thought about getting a 15-year note but went for the flexibility of the 30-year note, while paying it down at the 15-year pace. Over subsequent refinances, our interest rate dropped from 6% to 3%. Even though this made our required monthly payment much less, we kept up the higher monthly payments which had us on the pace of a 10-year payoff.

[Read more…]

Filed Under: Family, Frugal Living, Real Estate
Last updated: April 7, 2013
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

LikeAssets Review: A Reality Check For Your Portfolio

April 3, 2013 By Jonathan Ping 9 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Over the years, I’ve noticed that people tend to overestimate their own stock-picking prowess – myself included. Especially over longer periods of time, if you’re not tracking things carefully you probably don’t know how well you’re doing on a relative basis. We all tend to remember the winners and forget the losers. The sooner you figure out you’re not Buffett, the sooner you can improve your returns. (Otherwise, the sooner you can start your own hedge fund.)

If you like the idea of my Beat The Market Experiment but don’t want to expend too much effort in tracking your own performance, you should check out LikeAssets.com. This new portfolio tracking site recently became the backend for the Wall Street Journal’s Portfolio tool (paid subscribers only), but the direct site is free to all. I’ve been playing around with it for a few days, and here’s my review.

LikeAssets is similar to a Mint.com, SigFig, or Personal Capital (review) in that you hand over your login information and they automatically sync with your brokerage accounts to pull in your holdings. However, their key differentiator is that they automatically choose the appropriate benchmark ETFs based on your holdings in order to determine your “alpha” (excess return above benchmark). You don’t have to do anything. So if you’re holding a bunch of big dividend-paying companies, you’ll probably be matched up with a large-cap value index ETF. The custom benchmark goes even further to match your trades in real-time, not just your current asset allocation:

How is the LikeAssets custom benchmark calculated?
A benchmark portfolio is constructed based on the types of securities in your portfolio. When you make a trade, your custom benchmark portfolio mirrors the trade using an appropriate ETF or set of ETFs.

Once you sign up, you can either choose to import your data electronically from a supported brokerage firm, or manually input your trades. Supported firms include Fidelity, Vanguard, TD Ameritrade, Schwab, E-Trade, Scottrade, and OptionsXpress. Below is a screenshot of my linked TD Ameritrade benchmark portfolio. I would expect my “alpha” here to be close to zero as they are already passive investments, and that is indeed the case.


(click to enlarge)

Unfortunately LikeAssets only works with about 50 brokers right now, and my TradeKing speculative portfolio is currently not supported. Typing in the trades manually is somewhat of a pain as you’d expect, although the software does automatically fill in your buy/sell price based on the market’s closing price that day (not exact, but a good estimate and you can edit it). In addition, dividend distributions are automatically calculated for you (any reinvestment of dividends still must be input manually). Here’s a screenshot of my manually-input TradeKing account:

[Read more…]

Filed Under: Investing, Reviews
Last updated: February 9, 2017
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

$10,000 Beat-the-Benchmark Speculative Portfolio Update – April 2013

April 3, 2013 By Jonathan Ping 4 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Here’s the April 2013 update for my speculative portfolio, the second of three portfolios being tracked monthly as part of my Beat the Market Experiment. Here’s an update on the overall race; the bull stock market has pushed the passive benchmark portfolio into the lead past my lagging stock picks.

$10,000 Beat-the-Benchmark Speculative Portfolio as of April 1, 2013. Many people speculate with their money, buying and selling stocks now and then, but they rarely track their performance even though they may brag about their winners. Honest tracking is the primary reason for this “no-rules, just make money” account. I am using a TradeKing account for this portfolio as I’ve had an account with them for a while and am comfortable with their low-cost $4.95 trade structure, free tax-management gain/loss software, and free dividend reinvestment. Here is a screenshot taken from my TradeKing home page on 3/31/13 after market close:

[Read more…]

Filed Under: Investing, Monthly Updates
Last updated: April 3, 2013
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

$10,000 Benchmark Portfolio Update – April 2013

April 1, 2013 By Jonathan Ping 4 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Here’s the April 2013 update for my benchmark portfolio, the first of three portfolios started on November 1st, 2012 as part of my Beat the Market Experiment:

  1. $10,000 Passive Benchmark Portfolio that would serve as both a performance benchmark and an real-world, low-cost portfolio that would be easy to replicate and maintain for DIY investors.
  2. $10,000 Beat-the-Benchmark Speculative Portfolio that would simply represent the attempts of an “average guy” who is not a financial professional and gets his news from mainstream sources to get the best overall returns possible.
  3. $10,000 P2P Consumer Lending Speculative Portfolio – Split evenly between LendingClub and Prosper, this portfolio is designed to test out the alternative investment class of person-to-person loans. The goal is again to beat the benchmark by setting a target return of 8-10% net of defaults.

$10,000 Benchmark Portfolio as of April 1, 2013. My account is held at TD Ameritrade due to their 100 commission-free ETF program that includes free trades on the best low-cost, index ETFs from Vanguard and iShares. I funded it with $10,000 and bought all the ETFs required to be fully invested on 11/1/12. All trades were commission-free.

Here’s a screenshot from my account showing exact holdings and their market value on 3/31/13. With the current bull market, the benchmark portfolio gained nearly 10% in just 5 months.


(click to enlarge)

Here’s the asset allocation pie chart, tracked with a simple Google Docs spreadsheet:
[Read more…]

Filed Under: Investing, Monthly Updates
Last updated: August 9, 2018
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

New Safeway Gas Rewards Partners: Chevron, Texaco, Exxon, Mobil

April 1, 2013 By Jonathan Ping 12 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Depending on your area, Chevron, Texaco, Exxon, and Mobil gas stations are new partners with Safeway’s gas rewards program (Exxon/Mobil link). This may be good news to those who shop at Safeway supermarkets but don’t have any nearby Safeway gas stations.

The gas rewards program works using their free Safeway Club card. For every $1 in purchases, you get a point. Every 100 points gets you 10¢ off per gallon on a single fill-up (25 gal max) at a participating Chevron, Texaco, or Safeway gas station. You can stack rewards for up to 20 cents off per gallon at a Chevron/Texaco, or up to $1.00 off per gallon at a Safeway/Exxon/Mobil gas station.

So if you spent $200 at Safeway/Von’s over time, you’d get 20 cents off a gallon. With a 15 gallon tank, that’s a $3.00 savings = a 1.5% rebate. Not bad, considering it doesn’t cost anything and you can still use your cashback credit cards to get additional rewards. Chevron’s regular gas prices may be higher than other places, of course.

Filed Under: Deals & Offers
Last updated: November 18, 2013
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

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