The Bob Brinkers are advertising very impressive returns for the "Brinker Fixed Income Advisor" on their web site. (Click the image to see advertised returns.)
What they don't tell you is how poorly they did last year and how they have greatly under performed my advice until very recently to hold Vanguard's Total Bond fund (VBMFX) for your fixed income. (I recently sold ALL my bonds and bond funds that are not indexed to inflation and put the funds into investments that should do well in an environment of rising interest rates. Subscribe NOW to get my current advice for your "Core and explore" portfolio.)This table showing the COMBINED returns for the past three years less a month tells "the rest of the story" as the late Paul Harvey used to say.
| Brinker Fixed Income Advisor | 2009 YTD (through Dec 1) | 2008 | 2007 | 2007 to 2009 Combined |
| Model Portfolio 1 | 30.90% | (21.70%) | 8.60% | 11.3% |
| Model Portfolio 2 | 19.60% | (11.50%) | 6.80% | 13.0% |
| Model Portfolio 3 | 14.10% | (5.20%) | 7.20% | 16.0% |
| Vanguard Total Bond VBMFX | 7.74% | 5.05% | 6.92% | 21.0% |
| Vanguard GNMA Fund VFIIX | 6.88% | 7.22% | 7.01% | 22.6% |
| Retirement Advisor Model Portfolio #3 | 7.21% | 3.73% | 8.32% | 20.5% |
I also show the returns for our 100% fixed income portfolio in "The Retirement Advisor." We have slightly under performed the total bond fund. Our returns are lower by half a percent because we have inflation protection via a TIPS fund that hurt our 2008 returns AND we recently moved to safer CDs for our long-term fixed income allocation to reduce the risk of net asset value declines should the Fed decide it needs to suddenly raise interest rates.
I can't find Brinker's returns by year listed anywhere on his web sites for ANY of his newsletters!!! What is up with that? Vanguard and I do it. What is he hiding? Call his show and ask why.
I show all my returns for "Kirk Lindstrom's Investment Letter" by year here.
We show our return data for "The Retirement Advisor" here.
The table showing Brinker's poor performance for the "Brinker Fixed Income Advisor" newsletter portfolios relative to a simple total bond index may explain why he hides that information.
Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 158% (a double plus another 58% !) vs. the S&P500 UP at tiny 7.5% vs. NASDAQ UP at tiny 0.1% (All through
As of December 5, 2009, "Kirk's Newsletter Explore Portfolio" is up 33.0% YTD vs. DJIA up 19.1% YTD
Subscribe NOW and get the December 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)
(Your 1 year, 12 issue subscription will start with next month's issue.)
More Info:
Kirk? I think the biggest problem is?
ReplyDeleteMost Inwestors just don't want to go thru all the constant hassels of chaning their portfolio's all the time..
Be it % allocations or Changing Funds
Thus put it in A B&H mode in conservative Investments and the Hell with it.. Just plan on making 5-6% apy, add enough tocmpensate that to have enough for retirement and ? The Hell with it.
We just advise our Students to just Own VWINX, load it up and leave it alone otherwise.. Past 3 yrs = +12%
ReplyDeletepast 10 yrs ending 08' on a per $10k Cost basis ? = $16,275 tot. value or 62.75% Tot % Rtn..
If one can save just $500 more per yr into it, they will be in the top 10% tile of Portfolio's based upon Tot. Rtn on their $.
It's not the best, but surely not the worse and appeals to the Real Ave. Saver.. that don't want to be Investors..and have to go thru all the hassels of being one.. or thus more commonly called the Real Passive Investor.
Anonymous wrote: "Most Inwestors just don't want to go thru all the constant hassels of chaning their portfolio's all the time.."
ReplyDeleteActually, it is not much work at all if you are in the accumulation mode. You can tally up what you have and then put new funds into the asset classes you are under weighted to. You can also stop reinvesting dividends in funds you are over allocated to and have them automatically invested in the funds you are under invested in.
Also remember that "most living people" don't want to go to the Dr. or Dentist but if they want to live longer or be more healthy, they make the effort. Your financial health is no different in that a little work up front can pay off many fold decades later in life.
Anonymous wrote: We just advise our Students to just Own VWINX, load it up and leave it alone otherwise..
ReplyDeleteVanguard Wellesley Income (VWINX) Fund has been in the "sweet spot" for the past decade for asset classes. According to Yahoo!
http://finance.yahoo.com/q/pr?s=VWINX
"The investment seeks to provide long-term growth of income and a high and sustainable level of current income, along with moderate long-term capital appreciation. The fund invests approximately 60% to 65% of assets in investment-grade corporate, U.S. Treasury, and government agency bonds, as well as mortgage-backed securities. The remaining 35% to 40% of fund assets are invested in common stocks of companies that have a history of above-average dividends or expectations of increasing dividends."
Your comment reminds me of the president of this local investment company who asked me in 2000 why he shouldn't put 100% of his client's money into Lucent since that was the stock going up the most and it was well respected. His VP hired me in 2000 as an analyst for asset allocation advice since I was one of the few people in Silicon Valley telling my subscribers and free readers to "TAKE PROFITS ON TECH" and put some into GNMA, CDs, Value (dividend) stocks, US Treasury Strip Zeros, and other "value plays" to diversify from hot growth stocks. She wanted me to help convince her boss to diversify, not concentrate assets into even more growth. She was smart and saved her clients a ton of money as technology stocks melted down. It wasn't market timing but simple asset allocation where you take some off the table for what is working to buy quality that has been under performing.
The trouble with VWINX is there is no pure growth. I prefer Bob Brinker's first choice for a single equity fund, VTSMX your 120 less your age with the remainder in very short term assets and TIPS. I used to recommend Total Bond Funds but changed that recently with what I think is a bond bubble. Bonds could do well if we get deflation or we never see rates soar again, but I'm not willing to take that NAV risk. Thus, if you are 40 years old you might have 80% in VTSMX and 20% in fixed income. You can adjust the percentage to equities up or down 10% for aggressive or conservative risk takers.
Vanguard Total Stock Market Fund (VTSMX)
ReplyDeleteCharts