Portfolio Two is our second longest portfolio, at 11 years. The beneficiary contributed $6000 and the trustee contributed $12,000 for a total of $18,000. The current value is $28,334 for a gain of $10,334 or 57%, which works out to about 6.8% / year across the life of the portfolio. You can download the detail here or utilize the links on the right side of the page.
This portfolio has been buoyed by two star performers, Amazon (AMZN) and Facebook (FB). Both of those stocks have moved up substantially recently and account for half the total gain.
Poor performers are TransAlta (TAC), which was hammered by the drop in the Canadian dollar and the collapse of the commodity markets, and Wynn (WYNN) resorts which was hurt badly by changes in Chinese policy that limit gambling and especially “high roller” VIP gambling in Macau.
We will likely sell off all these stocks and move into cash and then ETF’s, likely following the approach listed in this post titled “Investing – Basic Plan” of low-cost ETF’s and CD’s purchased through a brokerage. At approximately $28,000, the portfolio would likely be about $10,000 5 year CD (at around 2% / year) and $9,000 of VTI (Vanguard total stock market) and $9,000 of VEU (Vanguard total stock market ex-USA). There would be about $6900 in net taxable gains that would need to be paid and the trustee / their parents need to decide who is going to pay this amount (if the rate was 15%, this would be about $1035 in taxes). If the taxes were paid out of this distribution, then we would be re-investing just under $27,000. This portfolio has unique reasons for doing the sell-off and re-investment into ETF’s that we don’t plan to repeat with other portfolios unless it is necessary.