So how did you do in 2012?

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Shakespeare
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So how did you do in 2012?

Post by Shakespeare »

FPX Indices at 2012.12.31
FPX Growth +8.170
FPX Balanced +6.397
FPX Income +4.175
With 40% equity:60% fixed income looks like I got about 7.5%.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: So how did you do in 2012?

Post by Spidey »

65% equity, 35% fixed-income, +9.90% IRR
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Re: So how did you do in 2012?

Post by chufinora »

After backing out contributions almost exactly 10%

80% equity 12% FI 8% cash - (Mostly dividend paying stocks and index ETF's)

(What is the FPX?)
Last edited by chufinora on 01 Jan 2013 10:11, edited 1 time in total.
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Springbok
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Re: So how did you do in 2012?

Post by Springbok »

Shakespeare wrote:
FPX Indices at 2012.12.31
FPX Growth +8.170
FPX Balanced +6.397
FPX Income +4.175
With 40% equity:60% fixed income looks like I got about 7.5%.

With a few things still needing adjustment, looks like we have a total return of just under 7%. (Final number 7.0%!)

This is calculated in the simple minded way I always use.
(Present portfolio value - 2011 year end value + net withdrawals)/2011 year end balance.

Our FI/Equity ratio has dropped from 55% at end of 2008 to 40%. Mainly due to lack of suitable FI investments :(

Interested to know how you got a 7.5% return with 60% FI given current low interest rates.
Last edited by Springbok on 01 Jan 2013 20:18, edited 1 time in total.
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Shakespeare
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Re: So how did you do in 2012?

Post by Shakespeare »

chufinora wrote:(What is the FPX?)
FPX Description | Market Data | Markets | Financial Post
springbok wrote:his is calculated in the simple minded way I always use.
(Present portfolio value - 2011 year end value + net withdrawals)/2011 year end balance.
Appendix:  Compound Interest Formulae and Weighted Returns
To make an approximate correction for additions and withdrawals, first separately subtotal all additions and all withdrawals. Then calculate the total change, T:

T = Additions - Withdrawals .... (3)

For example, if you contributed $2500 but withdrew $1000, T would be $1500.

Then use the modified formula below:

r = 100 * { [ ( FV - T/2 ) / ( PV + T/2 ) ]1/n - 1 } .... (4)
Interested to know how you got a 7.5% return with 60% FI given current low interest rates.
Luck. :wink:
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: So how did you do in 2012?

Post by IdOp »

For 2012, my overall portfolio IRR was about 9.75 % (without Dec 31 distributions if any). :)

The directly held (non-indexed) Canadian stock portfolio was 14.0 %. A comparable for Canadian stocks is the S&P/TSX Composite Total Return index which is up about 7.19 %.

For context the closing allocation was:

Code: Select all

  Cdn Cash  :   13.0 %
  US  Cash  :    0.7 %
  Cdn Bond  :   13.0 %
  Preferred :    2.5 %
  Cdn Eq Fnd:   18.0 %
  Cdn Stocks:   14.9 %
  US  Eq Fnd:   19.3 %
  Int Eq Fnd:   18.7 %

    Cash           :   13.6 %
    Fixed Income   :   15.5 %
    Canadian Equity:   32.8 %
    US Equity      :   19.3 %
    Intern'l Equity:   18.7 %
* My most index-like stock this year was Canadian Tire, at 7.15 % :)

* Top performers included ATCO, CP, Linamar and Nexen. Worst returns were from Enerplus, EXFO and CNQ.

* After 7 straight years of under-performing the index, the Canadian stocks have now out-performed for 4 years. Long way to go to catch up.

Code: Select all

          STK    TSX
  Year    IRR    Tot Retn
  ----   ----    ----
  2012   14.0     7.2
  2011   -8.4    -8.7
  2010   22.0    17.6
  2009   45.1    35.1
  2008  -39.9   -33.0
  2007    2.2     9.8
  2006   12.8    17.3
  2005    5.6    24.1
  2004    9.4    14.5
  2003   17.6    26.7
  2002  -17.1   -12.4
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Re: So how did you do in 2012?

Post by Descartes »

I was just closing the books this morning.

I managed 9.6% return on invest-able assets for 2012.
Equities at 63% (58% common, 5% preferred).

This was a good year and I'm still on track for "freedom 55" in 2020 but I was expecting double-digits this year.
My two biggest disappointments were TSE:CPG (the market being weary of their aggressive expansion dreams) and NASDAQ:AGNC (the market worried over the impact of continuing QE and the expectation of another dividend cut in 2013). I still hold both though.
"A dividend is a dictate of management. A capital gain is a whim of the market."
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Re: So how did you do in 2012?

Post by flywaysuzy »

The only part of my portfolio without any additions or subtractions, is the rrsp. Its easily calculated return was 10 % which seems good until the previous year's loss of 1.5% is factored in... :roll:
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Re: So how did you do in 2012?

Post by scomac »

Looks like about 9.2% for us by the back of the envelope. That is equity and bond ladder (77:23 :shock: ) with no allocation for the cash component.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
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Re: So how did you do in 2012?

Post by m1ax »

28%. 100% equities.
Another day, another dollar...
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scomac
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Re: So how did you do in 2012?

Post by scomac »

Shakespeare wrote:
With 40% equity:60% fixed income looks like I got about 7.5%.
Impressive! :thumbsup:
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
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Shakespeare
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Re: So how did you do in 2012?

Post by Shakespeare »

Thanks. But likely not repeatable with that mix and current rates.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: So how did you do in 2012?

Post by like_to_retire »

The target for my low risk retired income portfolio is 4.5%, and I beat that this year, so I'm pleased.

My rate of return for the year was 5.52%.

I only hold individual stocks, bonds, GIC's, preferred shares - no indexes or prepared products.

I hold about 75% in my non-RSP and 25% in my RSP.


Allocation: (since no one can agree on what preferred shares are, but I consider them fixed income - so I would say my allocation was 85% fixed / 15% equity).
=====================================
55% fixed income (limited to GoC bonds, Provincial bonds, GIC's in five year ladders).

25% preferreds (27% retractable, 24% high-spread fixed reset, 29% deemed retractable, 20% perpetual).

15% equities = (100% CDN dividend paying commons)

5% cash
=====================================

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Re: So how did you do in 2012?

Post by Quebec »

XIRR in Excel: 9.2% return for all retirement accounts (non-reg, TFSA, RRSP, combined wife and I)

Target allocation: 20% Canadian bonds, 26% Canadian stocks, 22.5% US equities, 22.5% EAFE, 3% emerging markets, 3% Canadian REITs, 3% Gold

Actual allocation: pretty close throughout the year

This seems like a good year, but I still have to figure out the benchmark return to see how I did compared to the indices. Should be pretty close since our portfolio is mostly indexed.
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Re: So how did you do in 2012?

Post by Lazy Ninja »

Up 10.82%, which puts me ahead of my benchmark (FPX growth), and the performance of my work DC plan, so I'm happy. Took a little money off the table towards the end of the year, and am now around a 71/29 equity/fixed income split.

scomac wrote: That is equity and bond ladder (77:23 ) with no allocation for the cash component.
I'm a little surprised at that scomac. Are you comfortable with that allocation?
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Re: So how did you do in 2012?

Post by iluvnascar »

If you're allocating between fixed income and equity........how would you classify preferred shares?
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Re: So how did you do in 2012?

Post by Springbok »

Shakespeare wrote:
To make an approximate correction for additions and withdrawals, first separately subtotal all additions and all withdrawals. Then calculate the total change, T:

T = Additions - Withdrawals .... (3)

For example, if you contributed $2500 but withdrew $1000, T would be $1500.

Then use the modified formula below:

r = 100 * { [ ( FV - T/2 ) / ( PV + T/2 ) ]1/n - 1 } .... (4)
For a single period (1yr) I doubt that formula makes mathematical sense. I look at it as I would for example, a single investment. Say I earn 10% pa on the investment. Government takes 40%, I end up with 6% pa return. In portfolio case, the annual draw is the tax!

BTW, talking of Gummy, I just noticed the eBooks he has written. Anyone read his book on how to lose money on stock market? Anyone contributed to the Amazon reviews?
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Re: So how did you do in 2012?

Post by peter »

16.1% XIRR on 100% equities, allocation 20% REIT, 25% Canadian, 22.5% US, 22.5% EAFE, 10% emerging, non-hedged.
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Re: So how did you do in 2012?

Post by ghariton »

Somebody's got to be low man on the totem pole. :wink:

6.1% on a portfolio of 62% RRBs, 35% international equities, 3% Canadian preferred, 0% cash.

I take a little comfort at looking at a six year horizon, end 2006 to end 2012 (I happen to have the 2006 numbers in front of me for another reason, I'm not cherry-picking :wink:). 4.2% annual average (i.e. geometric) return.

I think that's very good for a portfolio designed to minimize risk (however defined) and preserve capital. At any rate, I'm happy.

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Shakespeare
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Re: So how did you do in 2012?

Post by Shakespeare »

For a single period (1yr) I doubt that formula makes mathematical sense
Remember that you subtract 1/2 the contributions algebraically from the numerator and add them to the denominator - which means you add 1/2 withdrawals to the numerator and subtract 1/2 from the denominator.

The formula is correct if the withdrawals are evenly spread out and a constant arithmetic rate of return is assumed.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: So how did you do in 2012?

Post by ockham »

About 8.3%, 50/50 allocation, in capital preservation stage.

More important, in 2012 I clung successfully, dumbly or wisely, to my FI plan: rolling over a couple of 5yr GIC ladders and an 8yr strip bond ladder.
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Re: So how did you do in 2012?

Post by atchgwb »

Using the macro method referred to above, I estimate a solid 6% [difference in total portfolio this year cf last dec31, divided by 2012 dec 31]. Better than I would have predicted a year ago. I'm still expecting another shoe to drop.. hence 30% cash and near cash, 10-15% fixed income including RRBs, debentures, High yield bond fund leaving 55% equities mostly diividend-bearing, defensive value type companies. Vastly Canadian based. I view that as close to market returns..at less than market risk.
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Re: So how did you do in 2012?

Post by Springbok »

Shakespeare wrote:
For a single period (1yr) I doubt that formula makes mathematical sense
Remember that you subtract 1/2 the contributions algebraically from the numerator and add them to the denominator - which means you add 1/2 withdrawals to the numerator and subtract 1/2 from the denominator.

The formula is correct if the withdrawals are evenly spread out and a constant arithmetic rate of return is assumed.
I realize how the formula works and even tried putting my numbers into it. IIRC, it made one decimal point difference! I still don't think that the formula makes much sense for a single year return calculation when pattern of both inputs and outputs are not known or considered.

The important thing is to choose a way of calculating the return for yourself, and stay with it. The numbers are never 'accurate' or 'correct' (whatever those mean :)).

Only problem is that in this thread we are comparing apples and oranges :). That is why I stated method used.
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Re: So how did you do in 2012?

Post by westinvest »

With a portfolio mix of 24% Cash & GIC, 18% Bonds, 30% Preferreds, and 28% equities 2012 IRR was 4.86% according to Quicken. 3 yr AAR 7.91%, 5yr AAR 5.84%

About 3.5% of the 4.86% is from income, and 75% of that income is dividends, so my portfolio transition to withdrawal mode with full retirement this year is working out well for me, and I'd be very happy to keep this level of performance.
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Re: So how did you do in 2012?

Post by Springbok »

iluvnascar wrote:If you're allocating between fixed income and equity........how would you classify preferred shares?
In my case, after looking at the type of pfds I own (not many), I think that they have equity like risk, so I put them under equity. Less risky pfds, may be considered FI. I think you have to make your own rules.

I have convertible debentures too and there had to make a similar risk judgement.
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