I have an apology to make to my friend Harry … 

I have been tracking his balanced investment account—made up entirely of stock and bond index funds– and I have showcased his results on this website. 

But Harry isn’t happy…

During my last post, I indicated that Harry ‘s account had dropped 0.7% between September 30, 2008 and September 30^th, 2009.  Then I compared that 0.7% drop to the results of various balanced mutual funds from Canada’s biggest financial institutions, during that one year time period. 

And Harry beat all of the Canadian balanced funds that I could find.

But I didn’t do Harry’s account justice.

His account didn’t actually drop 0.7% from September 30, 2008 to September 30, 2009, as I had indicated.  It had dropped 0.7% from August 15^th, 2008 to September 30, 2009.  And there’s a huge difference—because the markets fell considerably from August 15^th, 2008 to September 30, 2008.  So I didn’t track his starting point fairly.  I didn’t track his account from the same day that I tracked the balanced mutual fund accounts’ performances.

So the reality is that Harry gave the mutual funds a bigger drumming than I thought.  Sorry Harry. 

Below, you can see his performances, compared to various indexes (reporting in both Canadian and U.S. dollars)

		Year-to-date	Last 12 Months	Since Inception(Jul/2008)
Harry’s Portfolio		13.39%	13.26%	0%
Dow Jones Index – CAD		-3.14%	-10.02%	-6.01%
Dow Jones Index – USD		10.66%	-10.49%	-11.72%
Russell 2000 – USD		20.99%	-11.08%	-10.03%
Russell 2000 = CAD		5.90%	-10.61%	-4.21%
S&P 500 – CAD		2.43%	-8.76%	-8.64%
S&P 500 – USD		17.03%	-9.24%	-14.19%
TSX – CAD		26.78%	-3.05%	-17.38%
TSX – USD		44.85%	-3.55%	-22.40%
TSX 60 – CAD		25.64%	-3.76%	-17.30%
TSX 60 – USD		43.54%	-4.27%	-22.33%
USD – CAD		-12.47%	0.52%	4.46%

Harry’s returns are pretty impressive.  According to Harry’s Q-Trade account tracker (a very nifty feature available for anyone using this Canadian brokerage, www.qtrade.ca)  Harry’s account has made the following gains:

Over the past 12 months:  +13.26% (in Canadian dollars)

Since January 1, 2009:  +13.39% (in Canadian dollars)

***Figures as of October 15, 2009

In U.S. dollar terms, that would be more than +17% over the past 12 months and nearly +18% since January 1^st, 2009—thanks to the 4.46% gain that, according to Q-Trade, the Canadian dollar has gained on the U.S. dollar during that time.

Harry’s recent move: 

And last night, Harry’s account was adjusted slightly.  Roughly $18,000 worth of his International Index fund (XIN.TO) was sold and traded for more of the short term Canadian government bond index (XSB.TO).  Harry’s account needed to be rebalanced, since the recent rise in stocks over-weighted his account in stocks.  You might recall that Harry did the opposite when stocks had fallen.  Earlier this year, he sold some bonds (which hadn’t dropped) to buy some cheap stock indexes (which had dropped).

Harry doesn’t attest to being a genius—he’s just a guy following responsible portfolio allocation who keeps his fees low, while remaining fearful while others are greedy, and greedy when others are fearful (to borrow Warren Buffett’s term).

Harry’s Challenge:

If your personal retirement portfolio has gained more than 17% in U.S. dollar terms (or more than 13% in Canadian dollar terms) over the past 12 months, then Harry and I want to hear about it.  We know that it’s possible.

Please post your response.

Harry’s portfolio was as follows, before his most recent trade:

Description	Symbol	Quantity	Currency	Current Price	Market Value	% Holdings
Cash			CAD		$99.23	0.0%
ISHARES CDN D/J SLCT DIV IDX	XDV	1,660	CAD	$18.45	$30,627.00	11.4%
ISHARES CDN DEX	XSB	3,250	CAD	$29.02	$94,315.00	35.2%
ISHARES CDN MSCI EAFE IDX FD	XIN	2,555	CAD	$18.15	$46,373.25	17.3%
ISHARES CDN S&P 500 HEG CAD FD	XSP	2,500	CAD	$12.66	$31,650.00	11.8%
ISHARES CDN S&P/TSX CP CMP IDX	XIC	1,130	CAD	$18.14	$20,498.20	7.6%
ISHARES CDN UNIV BD IDX FD	XBB	1,520	CAD	$29.23	$44,429.60	16.6%
Totals					$267,992.28	100%