Portfolio , TAA Investing


Last July, I posted summary statistics for various IVY style investment portfolios alongside some of the more traditional recommended investment portfolios like the 60/40 stock/bond portfolio. See that post here . Now that 2013 is well and gone and that I’ve decided to start posting my musings again, I’ve updated the statistics to include 2013 performance.

Here are the summary stats for the various portfolios from 1973 to 2013.

IVY Portfolio Stats May 9 2014




For definitions on the various portfolios and the terms also see the previous post on this topic. As one would expect 2013 did not cause any dramatic changes to the long term performance of the portfolios. Diversified portfolios have done great over the long term and diversified trend following portfolios do even better. The biggest change was to the SP500, 100% stock portfolio, with its gangbuster year in 2013, which bumped up the overall CAGR by 0.5%. Furthermore, when you break down the portfolios into sub-period returns its easier to see performance differences over time. Below I’ve broken out the returns into various periods.

IVY Portfolio Sub Period Returns May 9 2014



The last line in the table tells you the story of the last 5 years. A great bull market in US stocks. From the beginning of 2009, March 2009 if you want to be precise, a 100% US stock portfolio has outpaced just about everything else. It even drove a 60/40 ‘diversified’ portfolio to great returns. Over the last 5 years diversification has led to worse returns. This is typical in equity bull markets. During these bull markets it is important to keep the long term in perspective.

Look at every other line in the table above and at the summary statistics – over the longer term (at least one bull/bear cycle) diversification increases returns, lowers risk, increases SWRs, and builds greater wealth. That’s the most important point to remember. Continue to diversify and re balance. So far in 2014 diversification is re asserting itself. We’ll see how the rest of the year goes.

For those of you interested in the year by year performance detail, you can see my detailed spreadsheet here .


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15 thoughts on “ IVY Portfolio Summary,1973 to 2013: returns & risk

  1. Paul: What a welcome surprise to receive your post. So nice you have you back. I know I speak for the entire “investing for a living” community when I say; Welcome back!

    Kevin D

    Date: Sat, 10 May 2014 23:54:46 +0000 To: kevin_daly7@hotmail.com

  2. Thanks for the post. Nice to see data reinforcing the long term when formerly strong sectors like small caps are getting hammered in the short term.

    Please post whatever you are thinking. Great food for thought.

  3. What a pleasant surprise Paul, I was just playing around with firecalc.com to see how much I need to retire and came back to your website to look up CAGR and Std Dev for the GTAA AGG models. Even while you weren’t posting, I found myself visiting or referring others to your website at least once a month it seems. Thanks for the update!

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