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Monday, January 26, 2009

Bob Brinker Marketimer 2008 Performance Numbers

Below are the 2008 performance numbers reported by Bob Brinker for his three recommended model portfolios:
Model Portfolio I = Down 39.7%
Model Portfolio II = Down 37.4%
Model III (balanced) = Down 23.9%
Source: Bob Brinker's January 2009 "Marketimer" newsletter.

2008 Benchmarks:
  • The Wilshire5000 "total stock market index fund" at Vanguard, VTSMX (click for charts), was down 37.04%

  • The total bond fund at Vanguard, VBMFX (click for charts,) was up 5.05%
Model Portfolio I, down 39.7% in 2008, was 100% invested in equities for all of 2008.

Model Portfolio II, down 37.4% in 2008, was 100% invested in equities for all of 2008.

Bob Brinker's "balanced" Model III, down 23.9% in 2008, started 2008 with 64% in equities. This allocation shows just how bullish Bob Brinker was at the start of 2008. This bullish allocation hurt his performance relative to the "balanced benchmark."

Marketimer P3 Allocation as of 12/31/07

A "balanced" benchmark portfolio half in VTSMX and half in VBMFX finished 2008 down 16%. This is 7.9% better than Bob Brinker's balanced model portfolio #3.

When my writing partner, David Korn, and I began publishing The Retirement Advisor, we considered the universe of what people approaching or in retirement could invest in for their golden years. Many advisers were chasing stock market gains. Other advisers were chasing yield on the fixed income side. We believed that neither was the right approach and decided that our Model Portfolios would be constructed to benefit in up markets, but also be able to weather down markets such that our subscribers could preserve their capital in a reasonable manner, but take the appropriate risk, depending upon an individual investor’s comfort level.

Our Model Portfolio III has the goal of capital preservation in both up and down markets. That portfolio is up over 12% since inception and it gained 3.7% in 2008. Our model portfolios I and II take more risk with equities so they were down in 2008, but they managed to hang on to most of their 2007 gains and perform very well relative to the benchmarks as well as Brinker's portfolios.

My other newsletter, "Kirk Lindstrom's Investment Letter," is for more aggressive investors who what to use my "core and explore" strategy where you add individual stocks for enhanced (at least so far so good) returns.

Long Term Results that Speak for Themselves
Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390%
vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11
(More Info, Testimonials & Portfolio Returns)
Latest 2012 Update:  Up 10.5% YTD  as of 2/8/12

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4 comments:

  1. I happened to catch your radio program last Saturday. On it you stated that the inflation rate is a negative. Maybe I misunderstood you. You stated that this negative rate was calculated by the FED. I would like to know how the rate can be negative when the price of food is going up and when the price remains the same the size of the item is reduced. I personally can cite that this is true in the case of candy, cereals, propane and several other items including other food items. I like to know would who is claiming such a negative inflation rate and how are they calculating it, what items are they leaving out to make such a claim. I would like to see the response on the fan club page which I will check somewhat later.

    ReplyDelete
  2. I am not Bob, but I can answer your question.

    You can read the official press release "CONSUMER PRICE INDEX: MAY 2009" HERE

    This is the KEY part:

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in May before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the last 12 months the index has fallen 1.3 percent. This is the largest decline since April 1950 and is due mainly to a 27.3 percent decline in the energy index.

    You might remember a year or two ago Brinker used to claim that higher prices for energy were not inflationary. Obviously, lower prices for energy means the CPI declines.

    If you scroll down to Table A, you will see that indeed "Food and beverages" are up 2.7% year-over-year but the 27.3% decline in energy prices more than compensate for it.

    ReplyDelete

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