Thursday, January 3, 2019

Portfolio Model Returns Through 2018-12-31

2018 ended in the red.  There was a sharp downswing in the final quarter, leaving major stock indexes negative for the year.  The US bond index was exactly flat, and the foreign bond index was down about -2%.

Our diversified portfolio models, however, held their own against or outperformed their benchmarks.  Diversifying according to a prudent asset allocation model once again proved effective.

For example, an aggressive investor in the 95 Strategic IV model was down about -7.5% (after my firm's advisory fees and the mutual funds' internal expenses), while the benchmark was down -9.8%.  That same portfolio model would have outperformed the Dow Jones Industrial Average by about 1% per year over the 10-year period, too.

Here is how various portfolio models and benchmarks and indexes fared in 2018 (3mo, year 2008, and 1yr data are actual % moves.  2yr through 10yr data are average annual returns).


US and Foreign Indexes
3 mo 1 yr 2 yr 3 yr 5 yr 10 yr 2008
Stock Markets (72-21-7)
-13.3% -9.1% 4.9% 5.6% 4.1% 8.9% -41.0%
S&P 500 PR
-14.0% -6.2% 5.8% 7.0% 6.3% 10.8% -38.5%
Dow Jones Industrial Avg PR
-11.8% -5.6% 8.7% 10.2% 7.1% 10.3% -33.8%
MSCI EAFE
-12.9% -16.1% 1.1% 0.1% -2.1% 3.4% -45.1%
MSCI EM
-7.9% -16.6% 5.8% 6.7% -0.8% 5.5% -54.5%
Barclays Agg Bond--US
1.6% 0.0% 1.8% 2.1% 2.5% 3.5% 5.2%
Citi WGBI nonUSD (foreign bonds)
1.3% -1.8% 4.1% 3.3% 0.3% 1.3% 10.1%









Aggressive (95% stocks-5% bonds)
-13.6% -9.8% 3.6% 5.6% 3.5% 8.9% -38.9%
95 Strategic USA II
-9.5% -2.4% 7.3% 9.1% 7.2% 13.9% -26.3%
95 Strategic IV
-10.5% -6.4% 7.6% 8.2% 5.7% 12.3% -33.5%
95 Schwab index 2018
-14.4% -8.2% 5.7% 7.1% 5.4% 11.1% -37.9%
95 Schwab ETF 2018
-12.8% -7.9% 6.3% 8.0% 5.7%

Confluence Value Opportunities






-22.3%
Confluence Equity Income






-18.9%
WealthFront 9
-11.1% -9.1% 5.5% 6.8% 3.7% 9.0% -38.1%
American Funds Growth+Global
-14.2% -8.0% 7.9% 7.2% 5.4%










Moderately Aggressive (75-25)
-10.4% -7.5% 2.3% 4.1% 2.6% 7.3% -31.0%
80 Strategic IV
-8.4% -5.5% 6.5% 7.2% 5.0% 11.0% -29.2%
80 Schwab index 2017
-10.8% -5.5% 4.8% 5.8% 4.5% 9.1% -29.1%
80 Schwab ETF 2018
-9.7% -6.0% 5.5% 6.7% 4.9%

Money 75
-10.7% -5.6% 4.5% 7.0% 5.3% 10.8% -31.6%
American Funds Port Ser Gr+Inc
-9.7% -6.0% 5.7% 6.7% 5.5% 9.8% -32.7%









Moderate (60-40)
-8.3% -5.9% 2.1% 3.8% 2.5% 6.6% -25.6%
60 Strategic IV
-6.8% -4.6% 5.4% 6.3% 4.4% 9.9% -24.7%
60 Schwab index 2017
-8.6% -4.2% 4.1% 4.9% 3.9% 7.8% -23.8%
60 Schwab ETF 2018
-7.4% -4.8% 4.9% 5.8% 4.6%

American Funds Port Ser Moderate Gr+Inc
-7.0% -4.6% 5.2% 5.7% 4.6%










Moderately Conservative (40-60)
-5.6% -3.8% 2.2% 3.3% 2.1% 5.3% -17.4%
40 Strategic IV
-4.7% -3.5% 4.0% 4.9% 3.5% 8.1% -18.2%
40 Schwab Index 2018
-5.5% -3.6% 2.9% 3.1% 2.4% 5.9% -17.6%
40 Schwab ETF 2018
-4.9% -3.2% 4.6% 4.9% 4.3%

Hartford Balanced Income A
-4.8% -5.1% 2.9% 5.6% 4.8% 9.0% -18.5%









Conservative (20-80)
-2.5% -1.5% 2.0% 2.7% 1.7% 4.0% -8.4%
20 Strategic III
-2.2% -1.9% 1.8% 3.3% 2.6% 5.3% -9.0%
20 Strategic V
-1.3% -0.7% 3.8% 4.2% 3.5% 7.0% -9.6%
20 Schwab index 2017
-2.7% -0.6% 2.7% 2.5% 2.3% 4.3% -9.2%
20 Schwab ETF 2018
-1.3% -1.2% 2.9% 3.1% 2.9%



















NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.









NOTE 2:  "Flex", "Strategic", and "Index" models are crafted/run by Potomac Wealth Strategies.  They show history of better returns, lower volatility, or both--or, with the Index models, closer tracking--vs benchmarks and competitors.









NOTE 3:  "XX Schwab index" and "XX Schwab ETF" models are relatively low-cost and tax-efficient portfolios.  They are comprised mostly of index funds or exchange-traded funds available free of transaction charges to my clients at Schwab.  This is what many might recommend due to low-costs and portfolio efficiency.









NOTE 4:  Nothing on this blog post is specific investment advice to any individual or organization.  If the information hereon is of interest to you, please send e-mail to Info@PotomacWealthStrategies.com for a consultation.

Monday, November 19, 2018

Perspective on Portfolio Performance, Market Performance


It has been a frustrating year for investors, as the markets have been up and down a lot and many of us are at about breakeven so far.  But my clients have been doing well compared to the benchmarks, and that is a high-priority goal I have for long-term investors.

For perspective, here are some Year-To-Date returns (through Friday) for comparison:

S&P500 (USA stock mkt)                                         +2.34%
PWS' 75-25 moderately-aggressive benchmark        -1.73%
Vanguard Target Retirement 2035 mutual fund         -1.74%
MSCI EAFE index (large foreign companies)           -9.36%
Barclays Aggregate Bond index (USA bond mkt)     -1.95%

The S&P500 is the biggest portion of the moderate through aggressive portfolios, but since it represents just the largest USA-based stocks, those portfolios have a lot of other components (small companies, foreign stocks, cash, bonds, commodities).

If you have any questions or concerns about what benchmark is right for you, or how your portfolio is doing compared to the benchmark, please let me know and we will discuss it and make sure you are invested the right way for you risk tolerance and investment goals.

Thank you.

--Gary Partoyan
Potomac Wealth Strategies, LLC
2018-11-17

Friday, October 12, 2018

Portfolio Model Returns Through 2018-09-30

US and Foreign Indexes
3 mo 1 yr 2 yr 3 yr 5 yr 10 yr 2008
Stock Markets (72-21-7)
5.2% 10.9% 13.7% 12.8% 8.8% 7.7% -41.0%
S&P 500 PR
7.2% 15.7% 15.9% 14.9% 11.6% 9.6% -38.5%
Dow Jones Industrial Avg PR
9.0% 18.1% 20.2% 17.6% 11.8% 9.3% -33.8%
MSCI EAFE
0.8% 0.0% 7.7% 6.3% 1.7% 2.4% -45.1%
MSCI EM
-2.0% -3.1% 7.7% 9.8% 1.2% 2.9% -54.5%
Barclays Agg Bond--US
0.0% -1.2% -0.6% 1.3% 2.2% 3.8% 5.2%
Citi WGBI nonUSD (foreign bonds)
-2.2% -1.6% -2.4% 2.4% -0.2% 2.0% 10.1%









Aggressive (95% stocks-5% bonds)
4.0% 9.9% 13.0% 12.4% 8.1% 7.7% -38.9%
95 Strategic III
2.7% 10.5% 11.5% 12.3% 9.0% 10.5% -30.9%
95 Strategic USA II
4.8% 14.0% 14.4% 14.2% 11.0% 12.2% -25.8%
95 Strategic IV
2.3% 10.3% 14.7% 14.3% 9.7% 10.9% -33.5%
95 Schwab index 2017
4.7% 12.2% 14.6% 13.7% 9.9% 9.6% -34.3%
95 Schwab ETF 2018
4.9% 12.6% 14.8% 14.7% 10.3%

Confluence Value Opportunities
-0.2% 0.5%
9.9% 13.3% 12.5% -22.3%
Confluence Equity Income
2.4% 7.6%
14.2% 11.0% 11.1% -18.9%
WealthFront 9
3.2% 8.0% 12.1% 12.2% 7.5% 7.7% -38.1%
American Funds Growth+Global
3.4% 13.2% 16.0% 14.7% 10.3%










Moderately Aggressive (75-25)
2.9% 7.4% 9.0% 8.9% 5.9% 6.2% -31.0%
80 Strategic II
1.4% 5.3% 10.9% 10.7% 7.2% 9.9% -31.2%
80 Strategic III
2.6% 9.5% 10.3% 11.2% 8.3% 9.9% -27.7%
80 Strategic IV
1.9% 7.8% 11.7% 11.8% 8.2% 9.8% -29.2%
80 USA tilt
1.8% 6.9% 11.1% 10.6% 7.5% 9.4% -28.5%
80 Schwab index 2017
4.0% 10.2% 12.2% 11.4% 8.3% 8.3% -29.1%
80 Schwab ETF 2018
3.9% 9.5% 11.4% 11.7% 8.4%

Money 75
2.6% 9.4% 11.9% 11.9% 8.5%

American Funds Port Ser Gr+Inc
2.8% 9.0% 11.6% 12.0% 9.2% 8.9% -32.7%









Moderate (60-40)
2.3% 6.0% 7.2% 7.5% 5.1% 5.7% -25.6%
60 Strategic III
2.1% 7.4% 8.2% 9.2% 7.0% 8.7% -23.3%
60 Strategic IV
1.5% 6.3% 9.5% 9.9% 6.9% 8.9% -24.7%
60 Schwab index 2017
3.2% 8.1% 9.8% 9.2% 6.9% 7.2% -23.8%
60 Schwab ETF 2018
3.1% 7.3% 8.9% 9.6% 7.2%

American Funds Port Ser Moderate Gr+Inc
2.0% 6.2% 9.0% 9.6% 7.4% 7.9% -28.4%









Moderately Conservative (40-60)
1.8% 4.4% 5.3% 5.7% 3.9% 4.8% -17.4%
40 Strategic III
1.8% 5.8% 6.3% 7.4% 5.6% 7.7% -16.8%
40 Strategic IV
1.0% 3.9% 6.4% 7.3% 5.2% 7.4% -18.5%
40 Schwab Index 2017
1.9% 5.1% 6.5% 6.2% 4.7% 5.5% -16.2%
40 Schwab ETF 2018
2.2% 4.8% 5.8% 6.7% 5.5%

Hartford Balanced Income A
3.1% 3.1% 5.9% 8.4% 6.8% 8.7% -18.5%









Conservative (20-80)
1.0% 2.5% 2.8% 3.6% 2.5% 3.7% -8.4%
20 Strategic III
0.9% 1.7% 2.7% 4.4% 3.3% 5.0% -9.3%
20 Strategic IV
0.7% 2.4% 3.8% 4.9% 3.7% 5.9% -11.7%
20 Schwab index 2017
1.4% 3.5% 4.0% 4.0% 3.3% 4.0% -9.2%
20 Schwab ETF 2018
1.1% 1.7% 2.6% 3.8% 3.5%



















NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.









NOTE 2:  "Flex", "Strategic", and "Index" models are crafted/run by Potomac Wealth Strategies.  They show history of better returns, lower volatility, or both--or, with the Index models, closer tracking--vs benchmarks and competitors.









NOTE 3:  "XX Schwab index" models are relatively low-cost and tax-efficient portfolios.  They are comprised mostly of index funds available free of transaction charges to my clients at Schwab.  This is what many might recommend due to low-costs and portfolio efficiency.









NOTE 4:  Nothing on this blog post is specific investment advice to any individual or organization.  If the information hereon is of interest to you, please send e-mail to Info@PotomacWealthStrategies.com for a consultation.