I was reviewing my retirement portfolio returns in Vanguard the other day and decided I wanted to share those results with my readers. I feel very proud of my returns over the years. For those of you who are new to my blog, I’m a liberal arts major, a Millennial, marketer by day, and my own financial advisor. Over the last several years I have dedicated virtually all of my spare time to becoming financially literate so that I can one day become financially independent.
Below are my average retirement portfolio returns over the last 10 years. Again, I am been my own financial advisor, managing everything myself. I feel my returns are above average, and on top of that, my overall expense ratio is 0.08%. The only actively managed fund in my retirement account is the 2040 Target Date Retirement Fund from Vanguard. But I am actually beginning to phase that fund out as well so I can focusing solely on low-cost index funds.
My Retirement Portfolio Average Annual Rate of Return
- 10 years = 9.6%
- 5 years = 10.0%
- 3 years = 6.0%
- 1 year = 12.7%
Average Annual Returns of the Vanguard S&P 500 Index Fund
- 10 years = 6.94%
- 5 years = 14.62%
- 3 years = 8.84%
- 1 year = 11.93%
I am happy to point out that my retirement portfolio beat the market last year and has over the last 10 years. I am actually not really trying to beat the market either. I am just diversifying via low-cost index funds, and index funds really just match the market. But I have diversified further over the last few years by adding Small Cap Value, REITs (Real Estate Investment Trusts), and Emerging Markets to my portfolio.
Next I would like to add more “Value” index funds to my portfolio. Value stocks of those out of favor with investors and therefor seen as a better value at the time due to their cost. This would probably be large cap since I already own so much small cap value. Two of the financial minds I listen to most are obviously Warren Buffet, who is a huge “value” investor, as well as Paul Merriman, who is especially partial to small cap value.