Model Shadow Stock Portfolio Contests 2007 for Best Annual Return
by James B. Cloonan
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 |
| Data as of 11/30/2009. | ||||||||||||||||||
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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.
I was looking at the percentage figures presented in Table 1 and thought it would be interesting to translate those percentages into dollars. If at the beginning of 1993, when the Model Stock Portfolio began, you had invested $100,000 into an S&P 500 index fund you would now have a total of $345,353. If you had invested it in the Model Shadow Stock Portfolio you would have a total of $959,714 (ignoring taxes and reinvesting returns). Small percentages can mean a lot in the long run.
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