Updated 3/11/2018
I have spent some time reading about Jack Bogle lately. Jack Bogle was the founder of Vanguard, he also was the inventor of the index fund. Most of the funds in the Amazon 401k at Vanguard are index funds. I have cut down the amount of funds in my plan to 3 not including my company match of Amazon stock. So my investments are spread over three funds. It would be two funds, if Vanguard had a Russell 1000 index blend fund. Which they do not, so I have the growth and value fund in my investment mix. Jack Bogle would probably frown on the idea of not having any bond funds in my investment mix. My own personal opinion is that with interest rates rising, bond funds will have to drop in value to increase fund yields. The drop in price will out pace the increase in yields. My bond fund thoughts will change when the fed stops raising rates.
I am against target date funds. Why am I against target date funds?
You essentially pay five fees for four funds. Each fund in the plan charges a yearly fee for ownership. That is four separate fees for each fund. Then the target fund also charges another fee on top of the other four fees. So you will never see me choose a target fund for my own accounts, retirement or otherwise.
So what three funds am I investing in for this year?
I have spent some time reading about Jack Bogle lately. Jack Bogle was the founder of Vanguard, he also was the inventor of the index fund. Most of the funds in the Amazon 401k at Vanguard are index funds. I have cut down the amount of funds in my plan to 3 not including my company match of Amazon stock. So my investments are spread over three funds. It would be two funds, if Vanguard had a Russell 1000 index blend fund. Which they do not, so I have the growth and value fund in my investment mix. Jack Bogle would probably frown on the idea of not having any bond funds in my investment mix. My own personal opinion is that with interest rates rising, bond funds will have to drop in value to increase fund yields. The drop in price will out pace the increase in yields. My bond fund thoughts will change when the fed stops raising rates.
I am against target date funds. Why am I against target date funds?
You essentially pay five fees for four funds. Each fund in the plan charges a yearly fee for ownership. That is four separate fees for each fund. Then the target fund also charges another fee on top of the other four fees. So you will never see me choose a target fund for my own accounts, retirement or otherwise.
So what three funds am I investing in for this year?
Vanguard Institutional 500 Index Trust
State Street Russell Large Cap Value Index Non-Lending Series Fund; Class C
State Street Russell Large Cap Growth Index Non-Lending Series Fund; Class C
Updated 1/21/2014
The ones in blue are the ones in my current portfolio. I have added international funds to my portfolio. I would have liked to keep my
international funds limited to just Europe. However, we do not have
access to a "Brokerage Window"
So I am limited to what our 401k offers. On the bright side all of our international fund choices have
increased their exposure to Europe.
One thing missing from this table is Price/Book which was also considered while considering allocations of my investment mix.
Ticker
|
3 yr Beta
|
Treynor Ratio
|
Sharpe Ratio
|
Price
|
Yield
|
ANJIX
|
0.96
|
6.47
|
0.45
|
22.95
|
2.11
|
IGFRX
|
0.83
|
10.09
|
0.64
|
33.72
|
1.47
|
VTSNX
|
1
|
5.14
|
0.38
|
111.21
|
2.72
|
AVFIX
|
1.37
|
11.75
|
0.94
|
27.1
|
0.47
|
VINIX
|
1
|
16.08
|
1.3
|
168.5
|
1.85
|
VEXRX
|
1.3
|
13.7
|
1.07
|
96.69
|
0.2
|
TRLGX
|
1.2
|
15.58
|
1.2
|
27.65
|
0.04
|
VWNAX
|
0.99
|
16.25
|
1.3
|
64.79
|
2.03
|
VFTNX
|
1.04
|
16.47
|
1.3
|
11.65
|
1.38
|
AMZN
|
0.67
|
399.61
|
0
|
All data from http://finance.yahoo.com/ on 1/21/2014 or from Vanguard.com on 1/21/2014
12/23 Update coming soon: I am doing some forecasts for 2014, should be
done in a few days.
These are the choices I narrowed down for myself
based on their categories (i.e. small cap/large cap value/growth). Then I did a quick and dirty spread sheet to
analyze two important ratios that measure a portfolios returns. These are the Treynor and Sharpe Ratios. I also wanted to analyze the risk involved
with the funds, so I added in the 3 and 5 year betas to evaluate my
risk/reward. I also included the year to
date percentage increases.
AVFIX
|
|||
TRLGX
|
|||
VEXRX
|
|||
VFTNX
|
|||
VINIX
|
|||
VWNAX
|
|||
International Stock Funds
|
|||
ANJIX
|
|||
IGFRX
|
|||
VTSNX
|
ticker
|
3 yr beta | 5 yr beta | Treynor Ratio | Sharpe Ratio | Ytd % |
AVFIX
|
1.32 | 1.29 | 9.97 | 0.7 | 13.71 |
TRLGX
|
1.17 | 1.09 | 11.6 | 0.78 | 5.51 |
VEXRX
|
1.25 | 1.16 | 12.44 | 0.83 | 7.55 |
VFTNX
|
1.04 | 1.13 | 12.35 | 0.84 | 7.92 |
VINIX
|
1 | 1 | 12.55 | 0.86 | 10.6 |
VWNAX
|
1.03 | 1.02 | 11.55 | 0.79 | 5.74 |
ANJIX
|
0.92 | 1.05 | 7.95 | 0.48 | 3.45 |
IGFRX
|
0.84 | 0.82 | 10.27 | 0.57 | 2.5 |
VTSNX
|
1 | 1.05 | 4.33 | 0.31 | 2.91 |
All data from http://finance.yahoo.com/ on 5/27/13
Disclaimer: You should not treat any opinion expressed by Jay as a specific
inducement to make a particular investment or follow a particular
strategy, but only as an expression of his opinion and no one elses. Jay’s opinions
are based upon information he considers reliable. Past performance is not indicative of future results. I
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