Friday, March 21, 2008

Madame-X's Portfolio

Madame-X has been discussing the performance of her portfolio. The data she has shows that her 401k and Roth IRA are both worth less than the money she has put into them. There are two possibilties - either performance has been poor or the cost basis has been computed incorrectly (which often happens in my experience). I'm going to do a series of blog posts in which I analyse her portfolio and see which of these is more likely. Maybe I can come up with some suggestions for improvements. Anyway, here is her current portfolio allocation:

I won't be able to come up with an answer as to how much money she has made or lost but I will report on the performance of the different funds and which I like and don't like and what I think about the asset allocation. Some commenters on her post say she has too many funds. That's one issue I don't think is important. All it means is she (and I) have more stuff to track. Another commenter said she has too much mid and small-cap funds. That looks like it is the case and this part of the economic cycle is not good for those kind of firms and may explain some of the supposed poor performance. Otherwise, she seems to have a good mix of US and foreign stocks, a smaller amount of bonds. There are both actively managed and passive investments. One or two funds that I have heard of that have a good reputation (Royce, Muhlenkamp) and quite a few firms I have never heard of (ICON, Bridgeway, Thompson Plumb?). A large part of the portfolio is with Fidelity who are generally a solid and sometimes good manager. There are two individual stocks, which in total account for less than 1% of the portfolio. Anyway, I'll be doing all this much more systematically in the next few posts.

1 comment:

Madame X said...

Cool, this should be very interesting!