Here’s the July 2013 update for my Beat the Market Experiment, a series of three portfolios started on November 1st, 2012:
- $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.
Summary. Values are as of July 1, 2013. 8 months into this experiment, the passive benchmark portfolio remains the leader despite a slight drop this month. The speculative portfolio has definitely been more volatile and is back to lagging again. As for the P2P portfolio, it is starting to look like LendingClub may perform better than Prosper. Prosper simply has more late loans in the pipeline, although I’m still hopeful for solid overall returns.
$10,000 Benchmark Portfolio. I put $10,000 into index funds at TD Ameritrade due to their 100 commission-free ETF program that includes free trades on the most popular low-cost, index ETFs from Vanguard and iShares. The portfolio was based loosely on a David Swensen model portfolio. Screenshot, click to enlarge: