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Model Shadow Stock Portfolio Contests 2007 for Best Annual Return

by James B. Cloonan

Model Shadow Stock Portfolio Contests 2007 For Best Annual Return Splash image

The Model Shadow Stock Portfolio is down from its level three months ago as reported in the October 2009 AAII Journal, but is still up 61.1% for the year to date (November 30), as compared with 24.1% for the S&P 500 (as measured by Vanguard 500 Index fund). Comparisons for other time periods and with other indexes are illustrated in Figure 1 and Table 1.

  Avg An’l
Ret Since
Incep (%)
YTD
Ret
(%)
 
Annual Rate of Return (%)
2008.0 2007.0 2006.0 2005.0 2004.0 2003.0 2002.0 2001.0 2000.0 1999.0 1998.0 1997.0 1996.0 1995.0 1994.0 1993.0
Shadow Stock Portfolio 14.3 61.1 -50.8 -1.8 29.4 17.9 43.7 73.1 10.8 21.4 -7.7 0.0 -8.9 44.3 22.3 20.7 2.0 32.3
S&P 500 (VFINX) 7.6 24.1 -37.0 5.4 15.6 4.8 10.8 28.5 -22.1 -12.0 -9.1 21.1 28.6 33.2 22.9 37.4 1.2 9.9
Vanguard Small Cap (NAESX) 8.2 26.2 -36.0 1.2 15.6 7.4 19.9 45.6 -20.0 3.1 -2.7 23.1 -2.6 24.6 18.1 28.7 -0.5 18.7
DFA US Micro Cap (DFSCX) 9.9 17.8 -36.7 -5.2 16.2 5.7 18.4 60.7 -13.3 22.8 -3.6 29.8 -7.3 22.8 17.6 34.5 3.1 21.0

We still have a chance to rival 2003 as our best year ever, but will need a Santa Claus rally to get to +73.1%. By the time you read this, it will be decided. More importantly, we have not yet returned to the 2007 highs—neither the model portfolio nor the general market. At this time, it is hard to think of any driving force that would get us back to 2007 highs in the near term.

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James B. Cloonan is founder and chairman of AAII.


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