Saturday, January 23, 2010

* 2009-Q4 Progress Review

After each quarter-end I review my asset allocation and year-to-date total returns by category. The attached PDF contains my actual asset allocation as of 2009-Q4. Below is a high-level summary of the information contained in the PDF:

Asset Allocation Actual Target Diff.
Cash/Fixed Income 27.6% 27.0% 0.6%
Equities-Domestic 37.8% 39.0% -1.2%
Equities-Internl 23.3% 24.0% -0.7%
Employer Equity 11.3% 10.0% 1.3%
Total 100.0% 100.0%
Cash/Fixed Income 27.6% 27.0% 0.6%
Large Cap. 46.2% 48.0% -1.8%
Small/Mid Cap. 14.9% 15.0% -0.1%
Employer Equity 11.3% 10.0% 1.3%
Total 100.0% 100.0%

Asset Allocation

In the past, there have been three areas that I focused on from an asset allocation perspective: 1.) Employer/Company Stock, 2.) International Holdings and 3.) Cash/ Fixed Income Allocation. At the end of 2009, all three were relativity close to my targets. This is something I will continue to monitor and make adjustments as necessary.

2009-Q4 Performance

The forth quarter market improvement continued to be kind to my portfolio. After trailing the S&P through June, my income portfolio's performance and the S&P swapped leads throughout the second half. Unfortunately, the year ended while the S&P had the lead. Below are the YTD performances of various categories along with my S&P 500 benchmark (VFINX):
Portfolio Wtd. Avg. 2009 YTD 2008
Income Stocks 1.8% 23.9% -20.4%
Pocket Change (9/08) 14.0% 21.1% -7.3%
Income ETFs -4.9% 17.6% -27.3%
Asset Allocation 1.3% 31.0% -28.4%
Mutual Funds -5.8% 26.4% -38.0%
S&P 500 (VFINX) -4.9% 26.5% -36.3%
BRK.B -15.0% 2.2% -32.1%
Income Stocks vs S&P 6.7% -2.6% 15.9%
Income Stocks vs BRK 16.7% 21.7% 11.7%
When weighted with 2008, the Income Stocks, Pocket Change and Asset Allocation portfolios out-performed the S&P. The Income ETFs tied the S&P while the Mutual Funds portfolio under-performed it. As I have previously stated, it is my desire to beat the S&P over the long-run, so I don't pay a lot of attention to short-term performance either positive or negative.

Passive Income

For Q4/2009 my passive income averaged $920/month, up slightly from the $714/month in Q3. The increase resulted from fewer dividend cuts in my non-income portfolios and stable interest rates on cash holdings. The above amounts include all sources of passive income in my taxable accounts, primarily interest and dividends. It excludes my Roth IRA, 401(k) and blog income (which is not passive).

The next update will be in mid-April. As always, thanks for reading!
(Photo: sanja gjenero)

Cash/Fixed Income 28.0% 27.0% 1.0%
Equities-Domestic 37.9% 39.0% -1.1%
Equities-Internl 23.5% 24.0% -0.5%
Employer Equity 10.6% 10.0% 0.6%

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