I haven’t written about the Asset Class Battle in a while. The last update I wrote was all the way back in June. With all of this talk about allocation on the blog lately, now is a good time for an update.
I like to learn new words. I also like to pass them on to you. Long time readers may recall that I’ve talked about piloerections. In the last Asset Class Update, I discussed floccinaucinihilipilification. Try saying that one three times in a row! Try saying it at all!
Since I’m behind in my updates, today I’m going to give you a bonus. You are going to learn a new word that will make you sound witty, hyper-intelligent and get you sued for sexual harassment all at the same time. The word is:
Impressive looking, right? I’ll get to the meaning of it later. In the meantime, no Googling please. I’m watching!
Let’s take a look at a subset of my callipygous portfolio. I call it the
AssAsset Class Battle.
What is the Asset Class Battle?
I rolled my 401(k) over earlier this year. Instead of just putting it all into VTI, I decided to get a little crazy and roll it into different assets. Nothing like experimenting with almost $300,000, right? What could possibly go wrong!!
I put $30,000 into each of the following callipygous investments:
- VTI (same as VTSAX): This is the benchmark (US Total Market Index) and where most people should invest the majority of their money. The other eight investments will be judged based on how well they do against this one.
- VOO (same as VFIAX): This is the S&P 500 index. I had $30,000 dollars still sitting around the account, so I picked this one up during a market dip on 8/24/2015. To make it fair, I bought an equal amount in dollars to what I had in VTI at the time. I’m curious to see how the S&P 500 performs against the US Total Market Index.
- FCNTX (Fidelity Contrafund): This is an actively managed mutual fund that my 401(k) was invested in prior to rolling it over. Giving it a chance against VTI is a worthwhile exercise, although I hate the premium fee.
- VXUS (Vanguard International Stock): This provides exposure to investments outside of the U.S.
- VBR (Vanguard Small-Cap): I have read that small caps beat the bigger guys over time. Besides, Betterment also has this in its portfolio and the folks who work there are smart.
- VNQ (Vanguard REIT): I love real estate, but so far, I’ve been wildly unsuccessful in my attempts to purchase any property. A REIT allows me to own real estate.
- SCHD (Schwab US Dividend Equity): There are no shortage of people obsessed with dividends. I consulted Jason over at Dividend Mantra and this was his recommendation as far as funds go (Jason prefers to buy individual stocks over funds).
- VGT (Vanguard Information Technology): I love technology and feel that this sector has a better than average chance of outpacing the rest.
- BRK.B (Berkshire Hathaway): This is Warren Buffett and Charlie Mungers’ conglomerate. I’m a big fan of them, so why not see how they do?
Here is where my experiment sits as of 11/15/2015 (7 months from the start):
From best to worst:
- VGT: $30,421 (Tech is kicking ass!)
- FCNTX: $30,050
- SCHD: $29,046
- VOO: $28,964
- VTI: $28,827 (Total US Markets, the baseline)
- VNQ: $28,228
- BRK: $27,843
- VBR: $27,727
- VXUS: $26,444 (International markets are sucking it)
- The technology index fund, VGT, continues to lead the pack. If I were to rank my investments on a Callipygian Scale, VGT would be at the top of the list.
- The Fidelity Contrafund continues to outperform. The Contrafund has a high percentage of holdings in technology, so I expect it to move in similar fashion to VGT. Very callipygous indeed.
- The dividend growth fund, SCHD, moved up from #5 to #3 and is beating the market. I’m not a dividend investor, so all of you Dividend Heads can rub it in my face.
- Warren Buffett’s Berkshire Hathaway continues to underperform as some of its holdings have been struggling. Berkshire typically outperforms when the markets are underperforming, so I’m not worried about this one in the slightest.
- VNQ (real estate REIT) moved out of its last place position, but still lags the index.
- VXUS (foreign markets) is bringing up the rear. Not very callipygous. Or maybe it is?
- VBUTT*: Just kidding; there is no such thing.
What if I put it all into VTI or left it all in FCNTX?
- Current value: $257,550
- Everything in VTI: $259,443
- Everything in FCNTX? $270,450
Whoah, look at that? If I had just left it all in the Fidelity Contrafund, I’d be up almost $13,000! No worries here though. This experiment started in April, so isn’t even a year old. The true measure of performance (or callipygous character) will be how these investments perform over multiple decades.
Blasphemous, Scandalous, Callipygous
Now for the moment you’ve all been waiting for. I hope you didn’t already ask Google for the definition of callipygous. Brace yourselves.
Come back in the first half of 2016 for Update #3! I promise I’ll behave myself**!
And one more thing that has nothing to do with butts: My buddy Jeff over at Sustainable Life Blog asked me and a bunch of other bloggers some fun questions. The answer I gave to this question is one of the best things I’ve written in a while:
What do you think is the MOST Important thing people need to do to reach FI? (This could be something huge, like savings rate or something that is more directly related to expenses, like learning to cook)
*Even at the advanced age of 41, I am wildly immature.
**Hell no, what fun would that be?
Join the 10s who have signed up already!
Subscribing will improve your life in incredible ways*.
*Only if your life is pretty bad to begin with.