Saturday, April 23, 2011

2011-Q1 Performance 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 2011-Q4. Below is a high-level summary of the information contained in the PDF:

Asset Allocation Actual Target Diff.
Cash/Fixed Income 29.6% 29.0% 0.6%
Equities-Domestic 42.1% 41.3% 0.8%
Equities-International 22.6% 24.0% -1.4%
Employer Equity 5.7% 5.7% 0.0%
Total 100.0% 100.0%
Cash/Fixed Income 29.6% 29.0% 0.6%
Large Cap. 49.1% 50.3% -1.2%
Small/Mid Cap. 15.6% 15.0% 0.6%
Employer Equity 5.7% 5.7% 0.0%
Total 100.0% 100.0%

Asset Allocation

In the first quarter, my asset allocation was reasonably close to my target. My philosophy is to buy the best dividend stocks available and adjust my allocation using my 401(k) and other investments, when needed. None of the variances are above my 2.5% tolerance, so I will adjusted them with future purchases.

2011-Q4 Performance

For the year, my income portfolio and pocket-change-portfolio under-performed the S&P and Berkshire Hathaway (BRK.B), while my Income ETFs portfolio outperformed both benchmarks. Below are the YTD performances of various categories along with my S&P 500 (VFINX) and Berkshire Hathaway (BRK.B) benchmarks:

Portfolio Lifetime
Wtd. Avg.
'11 YTD
Income Stocks 5.5% 3.5%
Pocket Change (9/08) 7.8% 2.9%
Income ETFs 3.0% 21.9%
S&P 500 (VFINX) 1.7% 6.4%
BRK.B -1.7% 4.7%
Income Stocks vs S&P 3.8% -2.9%
Income Stocks vs BRK 7.2% -1.2%

When weighted with results from 2008 forward, all my income investments out-performed the S&P and BRK. 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. For more details on the performance of my income portfolios, including year-by-year performance and cumulative chart, please click here.

Passive Income

For Q1/2011 my passive income averaged $1,284/month, up slightly from the $1,184/month in Q4/2010. The increase resulted from additional investments and dividend growth. 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-July. As always, thanks for reading! See a list of all my income holdings here

(Photo: sanja gjenero)