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Frequent Contributor

Do M* members Benchmark their portfolios?

Personally I don't use a benchmark for my any of my portfolios. As an active investor in MFs, ETFs CEFs, and individual stocks it would be nearly impossible to benchmark a portfolio even if I wished, and I don't!

https://realinvestmentadvice.com/here-is-why-you-shouldnt-benchmark-your-portfolio/

 

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Re: Do M* members Benchmark their portfolios?

 I benchmark my portfolio have found it beneficial.

 

Two interesting facts from the article you referenced……….



1. ) "The annual studies from Dalbar show the dismal truth, individuals consistently underperform the benchmark index over EVERY time frame."


2. ) "The continual chase to “beat the benchmark” leads individuals to make emotional decisions to buy and sell at the wrong times; jump from one investment strategy to another, or from one advisor to the next."

 

Lance Roberts is the host of “The Lance Roberts Show” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Sells subscription newsletter

 

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Re: Do M* members Benchmark their portfolios?


@Bentley wrote:

 I benchmark my portfolio have found it beneficial.

 

Two interesting facts from the article you referenced……….



1. ) "The annual studies from Dalbar show the dismal truth, individuals consistently underperform the benchmark index over EVERY time frame."


2. ) "The continual chase to “beat the benchmark” leads individuals to make emotional decisions to buy and sell at the wrong times; jump from one investment strategy to another, or from one advisor to the next."

 

Lance Roberts is the host of “The Lance Roberts Show” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Sells subscription newsletter

 


The article in its whole doesn't support your simple conclusions, Bentley. You did notice the  heading on the link was Here is Why You Shouldn't Benchmark ...................

I assume you disagree with the author's poorly written article and not with me?

Out.

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Explorer ○

Re: Do M* members Benchmark their portfolios?

Not sure what I do qualifies as benchmarking, but I do measure my portfolio's results against the total stock market represented by VTI (Vanguard Total Stock Market ETF).  However, I don't attempt to beat VTI, rather I aim to achieve 75% of VTI returns with half of its volatility, as measure by standard deviation. I own ETF's, mutual funds and CEFs.

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Re: Do M* members Benchmark their portfolios?

trich, I play the old 'what if' game of occasionally going back to see where my portfolio would be if I had invested it all in Wellesley, but it just wasn't in my nature to let it ride.

Best

Out

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Re: Do M* members Benchmark their portfolios?

I do make some  comparisons using the Fidelity Performance Tab. Due to the fact that I have a portfolio of various assets (S&P, Mid-cap, Small-cap, REITs, EAFE and Emerging Markets) I find it hard to really compare to any benchmark. I am never going to have as good a return as the hot sector; however, I am never going to have as bad a year as the worst sector. Fidelity tells me that I'm up just over 19% YTD 2019. Personally I can live with that. If only every year the markets could be that good. To my knowledge it has nothing to do with stock picking - I'm mostly in iShares ETFs. I do have a couple of small things I toy with; but, that is not where I do my best and I know it.

Capital
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Re: Do M* members Benchmark their portfolios?


@outandabout wrote:

@Bentley wrote:

 I benchmark my portfolio have found it beneficial.

 

Two interesting facts from the article you referenced……….



1. ) "The annual studies from Dalbar show the dismal truth, individuals consistently underperform the benchmark index over EVERY time frame."


2. ) "The continual chase to “beat the benchmark” leads individuals to make emotional decisions to buy and sell at the wrong times; jump from one investment strategy to another, or from one advisor to the next."

 

Lance Roberts is the host of “The Lance Roberts Show” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Sells subscription newsletter

 


The article in its whole doesn't support your simple conclusions, Bentley. You did notice the  heading on the link was Here is Why You Shouldn't Benchmark ...................

I assume you disagree with the author's poorly written article and not with me?

Out.


 

  I posted no conclusions. What I did do was answer your question, "Do M* members benchmark their portfolios?" and provided two quotes from the article YOU referenced. The blogger you referenced also provided this information in another one of his articles he references.

 

 "A couple of years ago I wrote an article discussing Dalbar’s annual Quantitative Analysis Of Investor Behavior study. The study showed just how poorly investors perform relative to market benchmarks over time and the reasons for that underperformance.
With the release of Dalbar’s latest study, I thought it would be prudent to both update, and remind you, of the problems investors continue to face despite the ongoing media and mainstream rhetoric about “investing for the long-term” and other such nonsense.
First of all, let’s dismiss the notion that it is possible for an investor to consistently “beat” an index over long periods of time.
It isn’t."

https://realinvestmentadvice.com/dalbar-2016-yes-you-still-suck-at-investing-tips-for-advisors/

 Feel free to draw your own conclusion and remember, you posted Lance's article, not me............:)

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Re: Do M* members Benchmark their portfolios?

 I'm not interested in another article or a debate. Let's just say I don't benchmark and leave it there.

Have a good Thanksgiving.

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Re: Do M* members Benchmark their portfolios?

Given that my current portfolio consists of 6 leveraged funds (bonds, divey growth stocks, higher divey stocks, CEFs, Preferred stocks, and MREITs), I'm not sure what any benchmark would tell me.  Nevertheless, ifn my portfolio generates more cash than the bond or stock market index fund, I figure I am 'beating each market'!  That is, my 'benchmark' is the yield of both the bond and stock markets!

ElLobo, de la casa de la toro caca grande
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Re: Do M* members Benchmark their portfolios?

@trichebacher , Has your method worked well and over what time frame? What are some of the funds you use? Are you accumulating or drawing an income?

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Re: Do M* members Benchmark their portfolios?


@outandabout wrote:

Personally I don't use a benchmark for my any of my portfolios. As an active investor in MFs, ETFs CEFs, and individual stocks it would be nearly impossible to benchmark a portfolio even if I wished, and I don't!

https://realinvestmentadvice.com/here-is-why-you-shouldnt-benchmark-your-portfolio/

 


1) Portfolios?  Can you explain why several?  I have only one

2) Just select a benchmark and then test your portfolio performance.  

If you are invested mostly in stocks+CEF.  Did you beat VTI?

Did all your CEFs beat PCI?

If you own high tech companies how about using QQQ instead?

Just because you trade and/or own many positions it's not an excuse.

Do you know your total yearly performance?  How about setting one IRA account to meet your AA and risk tolerance and have your best 5 funds + only 3 stocks and you can't sell anything in 2020.  Then compare your total portfolio performance for 2020 and see which did better.  If the IRA did better you should be honest with yourself and do the right thing :-)

 

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Re: Do M* members Benchmark their portfolios?


@FD1001 wrote:

@outandabout wrote:

Personally I don't use a benchmark for my any of my portfolios. As an active investor in MFs, ETFs CEFs, and individual stocks it would be nearly impossible to benchmark a portfolio even if I wished, and I don't!

https://realinvestmentadvice.com/here-is-why-you-shouldnt-benchmark-your-portfolio/

 


1) Portfolios?  Can you explain why several?  I have only one

2) Just select a benchmark and then test your portfolio performance.  

If you are invested mostly in stocks+CEF.  Did you beat VTI?

Did all your CEFs beat PCI?

If you own high tech companies how about using QQQ instead?

Just because you trade and/or own many positions it's not an excuse.

Do you know your total yearly performance?  How about setting one IRA account to meet your AA and risk tolerance and have your best 5 funds + only 3 stocks and you can't sell anything in 2020.  Then compare your total portfolio performance for 2020 and see which did better.  If the IRA did better you should be honest with yourself and do the right thing :-)

 


LOL, FD, you been watching too much of Schiff's Impeachment inquires.

Little reason to go into great detail when the OP was just a simple question.

Have a good Thanksgiving.

Out

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Re: Do M* members Benchmark their portfolios?

Over time, I attempt to have my portfolio beat the S&P 500 with a higher dividend yield and a lower Beta.

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Re: Do M* members Benchmark their portfolios?

@Gary1952

For me the overall structure is maybe more important than the individual asset choices (I tinker with ingredients.). The structure is: 5-10% highly liquid, 25-35% equities (includes TRBCX, SPLV, IGV, IHI, USMV, RIPNX, MFAPX, PRIDX) , 20-30% CEFs (PCI, PDI, PKO, PCN,DFP, DSL), 20-30% bonds (includes PIMIX, DHSTX, VWAHX, JMUTX, etc).  In an emergency (personal or market crash) the cash flow from the CEFs and bonds can cover my living expense, which avoids having to sell stuff.  This has worked pretty well as I don't stress or become reactive to the endless daily drumbeats.  When I make changes their impact is assessed in the portfoliovisualizer.  

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Re: Do M* members Benchmark their portfolios?

I don’t benchmark my portfolio either, but I do tend to “compare” it to the market indices to see how it’s performing. I’m especially interested in performance during “downturns, sell offs” in the market, since I own a mix of mutual funds, individual “wide moat” dividend growers, bond funds, and cash (money markets). My “goal is to get at least 3/4 of the Wiltshire 5000 return, with only 1/2 the losses when equities turn south. So far I’ve been successful w/ that, and I’m happy with it. 

Win
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Re: Do M* members Benchmark their portfolios?

I benchmark my entire portfolio against a Target Date fund with a similar equity/fixed income split. If my active choices are not increasing returns and/or decreasing risk, or producing greater income if thats what I  need, why bother? I also invest in the benchmark itself.

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Re: Do M* members Benchmark their portfolios?


@Win1177 wrote:

I don’t benchmark my portfolio either, but I do tend to “compare” it to the market indices to see how it’s performing. I’m especially interested in performance during “downturns, sell offs” in the market, since I own a mix of mutual funds, individual “wide moat” dividend growers, bond funds, and cash (money markets). My “goal is to get at least 3/4 of the Wiltshire 5000 return, with only 1/2 the losses when equities turn south. So far I’ve been successful w/ that, and I’m happy with it. 


Win, the problem I have always had with any and all benchmarking is to figure out what I could/would ever change, in my investment strategy, to improve things, other than selling everything and buying a Wiltshire 5000 fund instead, should I find I am loosing to my benchmark!  8-)

Nevertheless, since I don't keep track of the historical value of my portfolio, let alone its historical return performance, the best I could do is to see how my portfolio compares to anything, but only on a day to day basis!

ElLobo, de la casa de la toro caca grande
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Re: Do M* members Benchmark their portfolios?

WHY? I expect my Managers to do it for me!

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Re: Do M* members Benchmark their portfolios?


@ElLobo wrote:

@Win1177 wrote:

I don’t benchmark my portfolio either, but I do tend to “compare” it to the market indices to see how it’s performing. I’m especially interested in performance during “downturns, sell offs” in the market, since I own a mix of mutual funds, individual “wide moat” dividend growers, bond funds, and cash (money markets). My “goal is to get at least 3/4 of the Wiltshire 5000 return, with only 1/2 the losses when equities turn south. So far I’ve been successful w/ that, and I’m happy with it. 


Win, the problem I have always had with any and all benchmarking is to figure out what I could/would ever change, in my investment strategy, to improve things, other than selling everything and buying a Wiltshire 5000 fund instead, should I find I am loosing to my benchmark!  8-)

Nevertheless, since I don't keep track of the historical value of my portfolio, let alone its historical return performance, the best I could do is to see how my portfolio compares to anything, but only on a day to day basis!


Win +1

El, why bother since you don't care about TR which is what everybody else is using.  If distributions are high you will OK forever. BTW, the more you reveal the more we can see how amazing you are.

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Re: Do M* members Benchmark their portfolios?

"Win +1

El, why bother since you don't care about TR which is what everybody else is using. If distributions are high you will OK forever. BTW, the more you reveal the more we can see how amazing you are."

Thank you, FD.  I take that as a compliment.

Methinks, however, you missed my first posting in this thread, two below yours.  Strike 6.

"

ElLobo
ElLobo
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Re: Do M* members Benchmark their portfolios?

Given that my current portfolio consists of 6 leveraged funds (bonds, divey growth stocks, higher divey stocks, CEFs, Preferred stocks, and MREITs), I'm not sure what any benchmark would tell me.  Nevertheless, ifn my portfolio generates more cash than the bond or stock market index fund, I figure I am 'beating each market'!  That is, my 'benchmark' is the yield of both the bond and stock markets!"

ElLobo, de la casa de la toro caca grande
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