A friend and faithful Wylie Money reader asked me- "Where are your charts? Your Graphs? The track record of your hypothetical portfolio as it takes the S&P 500 and thrashes it soundly, beating it into the ground?"
I started on a long post about how there is no free portfolio tracking tool that automatically re-invests dividends and capital gains pay-outs especially from a historical date and I have not found a good tool to allow me to do this manually for the 20 funds I plan to track...
Then I started thinking about my friend and his question and I got bitter and decided that he just wanted charts because his brain has frozen solid and gone numb because of all the snow he has suffered through recently (he lives in Denver).
Then I realized, yea... I need some charts. But it could be a bit tedious to manage so here is my plan:
I will chart the investment of $2500 per fund in each fund with $100 additional contributions on specific days I will pick each month (more about this process later). I am starting with a minimum of $2500 because several of the funds I have picked so far require this much and none of the funds I have picked (or will pick) require more than this- so one could actually follow this plan. Same reasoning behind the subsequent $100 additions.
I will do this one of 2 ways. I will pick about 20 funds total and either:
a) One of you can give me $50,000 and $2000 per month- which is the cost of investing in this entire portfolio and I will invest it and etrade can re-invest the distributions and capital gains!!!!!
or
b) I will set up a hypothetical portfolio- in Morningstar but please post a comment if you know of an easier to use free portfolio tool. And I will try and keep track of reinvesting dividends, etc. manually which will be tedious and make me sad.
or
c) I will just set up a portfolio to track daily NAV (prices) which will give a general sense of earnings and be less tedious.
Final note- until I pick all 20 funds, I will not set this up because going back and trying to get historical info and tracking the funds and picking new ones all at once would require more time spent on this that I am willing to commit.
1.09.2007
1.08.2007
Social Security
In response to this article about the US going bankrupt, I commented on Social Security including crazy ideas like rolling back the retirement age and giving all my 'projected' payments away.
I was discussing this with a friend over a frosty pint later on and he almost took his empty glass and wacked me over the head with it in a well-meaning attempt to knock some sense into me.
Anybody else want to buy me a pint o' cider and discuss?
I was discussing this with a friend over a frosty pint later on and he almost took his empty glass and wacked me over the head with it in a well-meaning attempt to knock some sense into me.
Anybody else want to buy me a pint o' cider and discuss?
1.07.2007
Non-Ret: Specialty Real Estate
My Pick: SSgA Tuckerman Active REIT Fund SSREX
These days may be the worst possible time to invest in Real Estate in general as prices have run up tremendously over the last few years. That said- Office Real Estate has still been rising- Boston Properties for example (Stock symbol: BXP) has been doing well- even as residential real estate has struggled.
Etrade's funds screener does not distinguish between funds that focus on commercial vs Residential Real Estate sectors- or a combination, etc. so it will be difficult to focus on a sub-sector using this research tool. This is OK as I do not want to try and chase market trends- I want to pick a good fund I can contribute to over time. Regardless, I picked the order of categories to diversify according to a progression and if I wanted to build a portfolio of 9 funds, Specialty Real Estate would be the category I would pick from next.
The best performing No-Load fund Etrade offers requires an initial $15,000 investment so I am not picking it. It also lists a turnover ratio of 1411%. This goes to show you that some managers can make big profits buying and selling constantly, but I would hate to get the tax bill for profits earned this way!
My pick is SSgA Tuckerman Active REIT Fund SSREX. It has a $1000 minimum initial purchase and lower than average expenses 1.00% and turnover 35%. The average for Real Estate Funds is expenses 1.48% and turnover 81.98%. It does make you wonder why Active is in the title since the turnover is only 35% but what are you gonna do?
These days may be the worst possible time to invest in Real Estate in general as prices have run up tremendously over the last few years. That said- Office Real Estate has still been rising- Boston Properties for example (Stock symbol: BXP) has been doing well- even as residential real estate has struggled.
Etrade's funds screener does not distinguish between funds that focus on commercial vs Residential Real Estate sectors- or a combination, etc. so it will be difficult to focus on a sub-sector using this research tool. This is OK as I do not want to try and chase market trends- I want to pick a good fund I can contribute to over time. Regardless, I picked the order of categories to diversify according to a progression and if I wanted to build a portfolio of 9 funds, Specialty Real Estate would be the category I would pick from next.
The best performing No-Load fund Etrade offers requires an initial $15,000 investment so I am not picking it. It also lists a turnover ratio of 1411%. This goes to show you that some managers can make big profits buying and selling constantly, but I would hate to get the tax bill for profits earned this way!
My pick is SSgA Tuckerman Active REIT Fund SSREX. It has a $1000 minimum initial purchase and lower than average expenses 1.00% and turnover 35%. The average for Real Estate Funds is expenses 1.48% and turnover 81.98%. It does make you wonder why Active is in the title since the turnover is only 35% but what are you gonna do?
1.03.2007
Online Banking
A friend recently asked me what I think about ING's new online checking account. I did not know much about it so I checked out Bank Deal's site and found a nice post.
The savings rate is ok for balances under $50k. If you have more than $50K in cash, it seems silly to keep it in a checking account. They do not issue check books and you cannot use all ATMs for free. I actually have an online bank account with Citi. I signed up during the height of the dot.com foolishness because they were giving out free Palm Pilots. I still keep the account but I have very little cash in it because the interest rates are sad. I keep it because I can use any ATM with no fee from Citi and complete reimbursement of fees from any other ATM up to a monthly limit which I never go over.
I actually use my etrade brokerage as a savings account as I have a tax free money fund (which helps since I live in Mass.). And I can transfer funds back and forth from etrade to Citi whenever I need to. I use Yodlee to keep track of all the accounts side by side and to keep track of the log-in info.
etrade actually has ATM cards and check books for their brokerage and I know someone who was trying to use their brokerage as a checking and savings account all in one. I will try and see how it is working for them...
If I were to open any new bank account I would choose eloan as they seem to have the highest rates on savings accounts among the better known online banks- but they do have a $5000 minimum...
The savings rate is ok for balances under $50k. If you have more than $50K in cash, it seems silly to keep it in a checking account. They do not issue check books and you cannot use all ATMs for free. I actually have an online bank account with Citi. I signed up during the height of the dot.com foolishness because they were giving out free Palm Pilots. I still keep the account but I have very little cash in it because the interest rates are sad. I keep it because I can use any ATM with no fee from Citi and complete reimbursement of fees from any other ATM up to a monthly limit which I never go over.
I actually use my etrade brokerage as a savings account as I have a tax free money fund (which helps since I live in Mass.). And I can transfer funds back and forth from etrade to Citi whenever I need to. I use Yodlee to keep track of all the accounts side by side and to keep track of the log-in info.
etrade actually has ATM cards and check books for their brokerage and I know someone who was trying to use their brokerage as a checking and savings account all in one. I will try and see how it is working for them...
If I were to open any new bank account I would choose eloan as they seem to have the highest rates on savings accounts among the better known online banks- but they do have a $5000 minimum...
1.01.2007
Living below your means
Food and Drink
Health and Fitness
Art and Entertainment
Do you have suggestions? Leave a comment or email me at wyliemoney at gmail dot com and I will add your suggestions to the list.
- Shop at reasonably priced grocery stores.
- When shopping, buy generic.
- Make your lunch at home.
- Save your leftovers and eat them for lunch.
- Plan ahead for food when traveling.
- When eating out, drink water.
- When eating out, if you don't know the price, don't order it.
- When eating out, don't eat at chain restaurants when cheaper options exist.
- Don't eat out often.
Health and Fitness
- Cancel your gym membership unless you need it
- Use all you Health Insurance Benefits (Some offer Fitness rebates)
Art and Entertainment
- Check out open studios
- Use Netflix and your local library for Movies and good TV instead of HBO and Cable
Do you have suggestions? Leave a comment or email me at wyliemoney at gmail dot com and I will add your suggestions to the list.
Disclaimer
This site is intended to Entertain, Educate and Enlighten. It is not intended to Advise, Authorize or Admonish.
I perform wacky financial experiments, share my convoluted experiences, and ramble on a good bit. Some of the investment ideas I explore involve hypothetical portfolios I track. Other ideas I dive into reference my own experiences. Just because something has worked for me in the past does not mean it will work for you or me in the future.
I am not a financial planner certified or otherwise.
My hope is that by exploring topics regarding saving, investing and managing money, you and I can both learn a little more than we knew before. I am by no means an expert and anything you read about on this site (or any other for that matter!), you would do well to confirm on your own before assuming, I got it right!
You and only you can make decisions, financial or otherwise, that are right for you.
I wish you all the best investing and managing your finances!
-Wylie
I perform wacky financial experiments, share my convoluted experiences, and ramble on a good bit. Some of the investment ideas I explore involve hypothetical portfolios I track. Other ideas I dive into reference my own experiences. Just because something has worked for me in the past does not mean it will work for you or me in the future.
I am not a financial planner certified or otherwise.
My hope is that by exploring topics regarding saving, investing and managing money, you and I can both learn a little more than we knew before. I am by no means an expert and anything you read about on this site (or any other for that matter!), you would do well to confirm on your own before assuming, I got it right!
You and only you can make decisions, financial or otherwise, that are right for you.
I wish you all the best investing and managing your finances!
-Wylie
Non-Ret: Large Cap Blend
My Pick: American Century Income & Growth/Inv BIGRX
So by now- you know my approach to picking each fund. I select the category in etrade'e mutual fund screener, sort by 3 year performance, cut and paste the performance, expenses, turnover ratio and a few other details into a spreadsheet, sort out the high expenses and high turnover from the top performers and look for a reason to choose a single fund from whatever is left over.
You can read some of the posts about the first seven funds I picked for this hypothetical portfolio so see the process in detail.
For Large Cap Blend funds, I did this and the T Rowe Price Retirement 2040 Fund/Adv PARDX stood out with a very low 0.25% expenses and 11% turnover ratio. But when looking at this in greater detail, I see that this fund invests in a 'bucket' of T Rowe Price funds each of which has its own expenses and turnover. This looks like a fund that attempts to do something similar to what I am doing with this hypothetical portfolio. This could be a decent fund to buy
if you wanted to invest in only one fund but since it holds funds that invest in various other categories I already have funds invested in, it does not make sense to buy it as a 'Large Cap Blend' fund.'
This leaves me with two choices:
Janus Fundamental Equity Fund JAEIX has done better than American Century Income & Growth/Inv BIGRX over a 3 year period but has trailed it recently. More relevant is that BIGRX has lower expenses, lower turnover and is more of a Large Cap blend- it is about half Large Cap Growth and Large Cap Value. JAEIX has a large Mid Cap Growth weight. It may out perform BIGRX if growth takes of soon as many predict, but this plan has a formula and is not trying to time the market so BIGRX is my pick.
So by now- you know my approach to picking each fund. I select the category in etrade'e mutual fund screener, sort by 3 year performance, cut and paste the performance, expenses, turnover ratio and a few other details into a spreadsheet, sort out the high expenses and high turnover from the top performers and look for a reason to choose a single fund from whatever is left over.
You can read some of the posts about the first seven funds I picked for this hypothetical portfolio so see the process in detail.
For Large Cap Blend funds, I did this and the T Rowe Price Retirement 2040 Fund/Adv PARDX stood out with a very low 0.25% expenses and 11% turnover ratio. But when looking at this in greater detail, I see that this fund invests in a 'bucket' of T Rowe Price funds each of which has its own expenses and turnover. This looks like a fund that attempts to do something similar to what I am doing with this hypothetical portfolio. This could be a decent fund to buy
if you wanted to invest in only one fund but since it holds funds that invest in various other categories I already have funds invested in, it does not make sense to buy it as a 'Large Cap Blend' fund.'
This leaves me with two choices:
Janus Fundamental Equity Fund JAEIX has done better than American Century Income & Growth/Inv BIGRX over a 3 year period but has trailed it recently. More relevant is that BIGRX has lower expenses, lower turnover and is more of a Large Cap blend- it is about half Large Cap Growth and Large Cap Value. JAEIX has a large Mid Cap Growth weight. It may out perform BIGRX if growth takes of soon as many predict, but this plan has a formula and is not trying to time the market so BIGRX is my pick.
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