Saturday, October 22, 2011

2011-Q3 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-Q3. Below is a high-level summary of the information contained in the PDF:

Asset Allocation Actual Target Diff.
Cash/Fixed Income 30.2% 29.0% 1.2%
Equities-Domestic 44.3% 44.1% 0.2%
Equities-International 22.6% 24.0% -1.4%
Employer Equity 2.9% 2.9% 0.0%
Total 100.0% 100.0%
Cash/Fixed Income 30.2% 29.0% 1.2%
Large Cap. 52.1% 52.1% 0.0%
Small/Mid Cap. 14.8% 16.0% -1.2%
Employer Equity 2.9% 2.9% 0.0%
Total 100.0% 100.0%

Asset Allocation

In the third 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-Q3 Performance

After under-performing in the first quarter, my income portfolio and pocket-change-portfolio out-performed the S&P and Berkshire Hathaway (BRK.B) year-to-date through September, while my income ETFs portfolio under-performed the S&P. 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 6.1% 6.5%
Pocket Change (9/08) 8.0% 3.0%
Income ETFs 0.9% -5.8%
S&P 500 (VFINX) 0.5% -6.4%
BRK.B -3.4% -11.1%
Income Stocks vs S&P 5.6% 12.9%
Income Stocks vs BRK 9.5% 17.6%

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 Q3/2011 my passive income averaged $1,355/month, down from the $1,415/month in Q2/2011. The decrease resulted from lower dividends in my non-dividend growth portfolio, lower interest income from cash investments and higher cash investments. 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-January. As always, thanks for reading! See a list of all my dividend growth holdings here.

(Photo: sanja gjenero)

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