Portfolio Five is almost 5 years old. The beneficiary contributed $4000 and the trustee $8000, for a total of $12,000. The current value is $14,522, for a gain of $2522 or 21%, which is about 4.3% / year when adjusted for the timing of cash flows. Go here for details or see the link on the right of the page.
We are looking at several stocks. ConocoPhillips (COP) has been hit hard by the decline in oil prices, but has kept a modest dividend. Spirit Airlines (SAVE) has been a great stock but has come down recently. Tata Motors (TTM) provides some diversity in terms of currency and emerging markets but is down about 20% from highs. Juniper Networks (JNPR) has been doing well but long term they face risks from Amazon (AMZN) and the cloud.
Portfolio four is almost 8 years old. The beneficiary contributed $4000 and the trustee $8000 for a total of $12,000. The current value is $15,082 for a gain of $3,082 or a 5% rate of return, adjusted for the timing of cash flows. See detailed PDF here or go to the link on the right side of the page.
The portfolio has some technology stocks that are doing quite well, which include Box and Oracle (you could also call Tesla a partial technology stock, as well). The oil stocks of Devon, Shell and Statoil have generally been hit by the continued fall in oil prices. The stock prices of Shell and Statoil have held up better than Devon because they kept their high dividends; Devon cut their dividend and has continued to fall (there are other factors at play as well).
It is important in all these portfolios not to just look at the current share price when compared with the purchase price; you need to take into account dividends, as well. The oil stocks look bad on stock price alone but when cumulative dividends paid are tracked as well, the situation is much better. That does not mean that we should hold stocks just for the dividends, but it is a very important factor in long run performance. To date this portfolio has earned $1735 in dividends, which makes up more than half of the total return earned to date.
Portfolio Two is 12 1/2 years old. The beneficiary contributed $6500 and the trustee $13,000 for a total of $19,500. The current value is $33,334 for a gain of $13,834 which is 71% or 7.4% / year when adjusted for the timing of cash flows. You can see the portfolio detail here or go to the links on the right.
This portfolio is different than the other portfolios because it has shifted to ETF’s and CD’s. The ETF’s are broadly tied to the US and non-US stock indexes. There is also a CD that returns 1.55% / year for $10,000 in the portfolio.
Since markets have gone up over the last year, this portfolio has done well (it tracks the market). All of the ETF’s are near 100% of their 52 week high, which means that they are at or near their highs and the indexes have been rising continually over this time period.
Unlike the other portfolios, which are invested in individual stocks, these ETF’s do have annual expenses. You can’t “see” the expenses because you receive the returns “net” of expenses, but this is disclosed. Over the 1 1/2 years that we’ve had this portfolio the low cost ETF’s cost $86, which is very low for a portfolio of over $30k. If you go back ten or fifteen years ago mutual funds would routinely cost 2% or more each year which would be $600 / year on a portfolio of this size. It is a testament to the efficiency of ETF’s (which drove competition in the mutual fund markets, mutual fund expenses have been driven down proportionally, as well) that these sorts of rock bottom expenses are now commonplace if you know where to look.
In a technical note, the CD does fluctuate in value (a bit), but I record it at cost ($10,000) since we intend to hold it to maturity. The cost fluctuations thus do not matter.
Finally, in another note, when I moved this portfolio over to Google Sheets, I noticed that I had been overstating the contributions in the “cash flows” calculation since 2012. Thus the recorded return since inception now looks higher. The value of the fund was always correct it was just the calculation of total gains to date that was incorrect.
Portfolio One is 15 1/2 years old. The beneficiary contributed $7500 and the trustee $15,500 for a total of $23,000. The current value is $41,421 for a gain of $18,421 or 80%, which is about 6.2% / year when adjusted for the timing of cash flows. You can see the data here or follow the link on the right.
The portfolio is generally doing well. This portfolio is the first to be moved from a trust fund to the beneficiaries control (although technically they were under control from 18 onward). The trustee now has agency to track the stocks and dividends and make transactions. Now there will be charges for buys and sells (I think it is about $20 / trade) but this shouldn’t be too bad since we don’t do a lot of transactions annually.
Portfolio 3 is 9 1/2 years old. The trustee contributed $5000 and the trustee $10,000 for a total of $15,000. The current value is $17,483 for a gain of $2,483 or 16%, which is about 2.7% / year when adjusted for the timing of cash flows. You can see the detail at the links on the right or go here.
The portfolio is generally doing well. We will consider selling ConocoPhillips (COP) which has been selling off assets to pare down debt and reduced their dividend. Their stock has stabilized but this may not be the best oil play. We are also sticking with ExxonMobil (XOM) which we bought near a high because that company has proven to be well run over the last few decades.
In the new “analytics” tab you can see that this portfolio has a heavy non-US component, with 62% of stocks from non-US countries. We have 2 of the 3 major Chinese internet companies and also 2 large Canadian banks, among others.
Portfolio Four is 7 1/2 years old. The beneficiary contributed $4000 and the trustee $8000 for a total of $12,000. The current fund value is $14,444 for a gain of $2444 or 20%, which is 4% / year when adjusted for the timing of cash flows. You can see the detail here or go to the links on the right.
We have a couple of stocks on watch. Devon Energy (DVN) got waxed with the downturn of the oil industry a couple of years ago and has recovered a lot of its losses but cut its dividend significantly in the interim. DVN seems to be plateauing and is thus on watch. Oracle (ORCL), the technology company famous for its database software (although they own many other products, including cloud software) is in a long term price and technology war with AWS and other cloud providers (including Microsoft’s Azure). They have been performing well but are on watch as a result.
There are analytics on the “analytics” sheet. A few worth paying attention to is the price as a % of its 52 week high, which shows its relative strength over the last year (obviously anything near 100% means that the stock is moving up and hitting highs regularly). The portfolio is 68% US stocks and 44% of them are “high dividend” (meaning a dividend around 3% and higher).
Portfolio eight is 2 1/2 years old. The beneficiary contributed $1000 and the trustee $2000 for a total of $3000. The current value is $3201 for a gain of $201 or 6%, which is 4% / year over the life of the fund. Go here for a view of the stocks or use the links on the right.
The stocks are 1/2 US and 1/2 foreign and right now we are watching Gilead (GILD), one of the health care stocks that is potentially impacted by various health care proposals.