Since my previous update, the Sleepy Mini Portfolio has gained 3.75 percent due to a rally in the stock markets over the fall months. It is now just over five years since the Sleepy Mini Portfolio was launched in August 2007 with an initial investment of $1,000 with a target allocation of 20% bonds, 20% Canadian stocks, 30% US stocks and 30% International stocks. Another $1,000 was added to the portfolio every quarter since then for a total investment of $21,000. Here’s how the portfolio looks as of December 11, 2012:
TDB909 – Canadian Bonds – $4,629 (19.4%)
TDB900 – Canadian Equities – $4,738 (19.9%)
TDB902 – US Equities – $7,011 (29.4%)
TDB911 – International Equities – $7,457 (31.3%)
Total – $23,835
Total Invested – $21,000
The idea behind the Sleepy Mini Portfolio is to follow a mechanical investment strategy of committing savings to a long-term portfolio on a regular basis. Therefore, we will add another $1,000 to the portfolio and rebalance it to the original target allocation using this rebalancing spreadsheet. Here are the results:
Transactions
TDB909 – TD Canadian Bond Index (e-Series) – Buy units for $337.63.
TDB900 – TD Canadian Index (e-Series) – Buy units for $228.79.
TDB902 – TD US Index (e-Series) – Buy units for $433.58.
Inspite of the economic troubles in Europe, International markets have outperformed other markets over the past quarter. Therefore, we will skip making a contribution to the International stock portion of the portfolio.
Readers are often curious about the annualized returns of the Sleepy Mini Portfolio. It is easy to calculate using the XIRR function in Microsoft Excel. Plugging in the dates, contributions and the current portfolio value tells us that the Sleepy Mini Portfolio returned an annualized 5.3 percent over the past five years.
[NB: An earlier version reported the rate of return of this portfolio incorrectly as 7.2 percent.]
