Marotta’s 2013 Gone-Fishing Portfolio Review

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Fish Measuring Station

A gone fishing portfolio keeps investing simple. Last year in 2013 we recommended just 12 investments. We made only minor changes in 2013, and minor changes again in 2014. Let’s look at how last year’s 2013 recommendation has done over the past year. We will use the asset allocation for $100,000 for a 40-year old:

2013 Gone Fishing Age 40

During 2013, the S&P 500 had the best returns. The S&P 500 return was 32.39%. You can’t invest directly in an index. Consequently, Vanguard S&P 500 (VOO) did the best in the portfolio returning 32.33% and has the lowest expense ratio of only 0.06%. The expense ration for the entire portfolio is only 0.36%

The 2013 portfolio had a 12.53% return. While US Stocks outperformed other categories in 2013, Foreign Stocks outperformed in 2012 and US and Foreign bonds were the top performers in 2011.

However, finding the highest performing asset class each year isn’t a good investment strategy. By creating broadly diversified portfolios which invest around the world, we are able to focus on the finish line of financial security rather than risk that security chasing the biggest returns. Every asset class will have a best day and a worst day, but diversification dampens that volatility allowing you to better stay on track to meet your financial goals.

We would not expect a portfolio of 14.6% bonds and cash (Stability) to normally out perform the S&P 500. But the portfolio has held up well over the past decade.

2013 Gone Fishing Performance

The US technology ETF was up 30.91%

The Country specific exchange traded fund (ETF) investments did well over the past year with the following actual returns: Switzerland (26.47%), Hong Kong (10.44%), Canada (5.41%),  Australia (3.74%), and Singapore(0.96%). The Natural Resources ETF was up 15.89%, but the REIT ETF was only up 2.42%.

The US Bond mutual fund was down -2.21% and the foreign bond fund was down -6.97%.

I have explained the few changes I have made in the 2014 Gone Fishing Portfolio recommendation and you see the new 2014 gone Fishing Calculator.

Photo by Kerry J used here under Flickr Creative Commons.

Follow David John Marotta:

President, CFP®, AIF®, AAMS®

David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.