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:
- $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.
- $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.
- $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.
Here’s the asset allocation pie chart, tracked with a simple Google Docs spreadsheet:
No new trades over the past month as the allocations are still close to targets. Received about $40 in dividends. Here is the target asset allocation again:
Due to simplicity and small portfolio size, for now I am going with 100% stocks and no bonds. This is meant to be appropriate for young investors, who should try to get a long horizon for stocks and can add more bonds later on. According to popular glide paths, a rule-of-thumb is having your age minus 20% in bonds. Here are the ETF components that represent each asset class:
US Total Market – Vanguard Total Stock Market ETF (VTI)
US Small Value – Vanguard Small Cap Value ETF (VBR)
International Total Market – Vanguard FTSE All-World ex-US ETF (VEU)
International Small Value – Vanguard FTSE Emerging Markets ETF (VWO)
Real Estate – Vanguard REIT Index ETF (VNQ)
I hope that VXUS is added soon to their commission-free list, as it is a more complete ETF than VEU.
Total value of stocks: $10,808.93
Cash balance: $176.09
Total portfolio value (3/2/13): $10,985.02
2013 YTD return: 6.1% (based on $10,350.65 value on 1/1/13)
Total return since inception (11/1/12): $985.02, or 9.9%