Losing patience with Large Caps

[Scanner]

My wife's average return over 10 years ending 3/31/2008: Drum roll:

3.43%



Now, thank God my Roth IRA had International + Commodity.

I know the wisdom and pundits - diversification + time. "Oh, just be patient, Scanner. . .the pundits say stocks outperform all other asset classes and large stocks are da' bomb."

But geez, what's starting to irk me is our college money is tied up in Large Caps not by choice in the 529 Target funds.

We have time for retirement. . .college, another story. . .time isn't on our side. We have 8 years left.

I may have to start to conclude that we made a mistake on investing in Blue Chips instead of continually throwing good money after bad year after year.

[jIM_Ohio]

First- underperformance followed a period of significant over performance. Get a 15 year clock and things look better.

Second- underperformance might be followed by over performance (did you buy when market was low).

Third- there is a reason I use dividend investing for 45% of my portfolio. it is quite boring seeing 2% yield year in and year out. But over time that stablizes my returns, because I know I will get that 2% regardless of what market does. That gives me more shares, so when market goes up I have more pieces to play with.

I did a quick status check of investments yesterday for first time all year-

401k is up between 3% and 5% per fund. Every fund I had went up except company stock. This blew me away.
IRAs are down about 5% each from Jan 1 levels. This does not include dividends, so I might be down even less.
PRPFX is up as well ytd.

[rooskers]

Scanner out of curiousity have you been dollar cost averaging or have you just been putting in large chunks into the 529 each year? I have found that all my investments that I have dollar cost averaged over a 10 year period have been averaging about 8% per year even with this decline in the market. The one investment I put one chunk in and have left has actually lost money in the last 10 years.

[JBinKC]

That doesn't surprise me. It is about the same return of the DOW over the same period. Large cap stocks derived in the states simply aren't growth vehicles and should be shunned for that reason.

[disneysteve]

My small company value fund is down 9.65% YTD, though 5-year is +17.05% and 10-year is +9.34% so that's not too shabby.

As for that S&P 500 fund, remember that the 5-year return is +11.18%, so it depends how long you've been in it and when you invested. That 3.43% is only if you put all of your money in 10 years ago and left it there until now. Your personal rate of return is probably a fair amount better than that if you've been investing over time.

[scfr]

Scanner - What is the return on your TOTAL portfolio? Isn't that what matters?????

[My English Castle]

My daughter's 529 took the same hit. Very ugly.

[jc3900]

Scanner - What is the return on your TOTAL portfolio? Isn't that what matters?????

I was wondering the same thing. Did you invest a lump sum ten years ago. If not, then I would guess you have had 8% return or so.

[Scanner]

I wouldn't really know what my total return on the portfolio would be. . .that would be hard to calculate - I guess I could gather all contributions and then see what my balance is and calculate a real basic rate of return.

Scanner out of curiousity have you been dollar cost averaging or have you just been putting in large chunks into the 529 each year?

Rooksers:

YOu know what? Guilty as charged. I am mostly complaining about my one part of my retirement portfolio and I have just thrown money at it in lump sums.

The 529's are dollar cost averaged.

At the very least, I could dollar-cost-average a part of it. Even set up $100/month withdrawals and lump sum contribute the rest.

[scfr]

I wouldn't really know what my total return on the portfolio would be. . .that would be hard to calculate - I guess I could gather all contributions and then see what my balance is and calculate a real basic rate of return.

Try this:

How to figure your portfolio's return - USATODAY.com

[Scanner]

Oh yeah, that looks simple.

[noppenbd]

I posted an Excel spreadsheet in another thread that I think calculates rate of return properly. Here it is again.

[scfr]

Scanner - If you're not shy about posting your numbers, I'll bet there are folks on this board who own a financial calculator and could help you. In fact, if I give in to my current bout of "consumer lust" , I may own one myself before too long.

[Scanner]

I wouldn't mind posting my numbers but I am not sure I have record (I am sure I don't) of every contribution I have made over the last 11 years and when and what date it occurred.

You would need all of that, right?

[LuxLiving]

scfr, one's been on my Christmas list for the last four years!