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Annual Review of the AFM iShares Retirement Portfolio

By JLP | April 18, 2012

I have been tracking a retirement portfolio for several years here at AFM. It’s split 30/20/50 between domestic stocks, international stocks, and fixed income, respectively. The domestic stock portion is invested evenly in the 10 sector exchange-traded funds that make up the Dow Jones Total Market Index. The international stock portion was invested in the iShares MSCI EAFE Index Fund from 2004 through 2009 when it was replaced with the iShares MSCI All World (excluding the U.S.) Fund (ACWX). The fixed income portion was represented by the iShares Lehman Aggregate Bond Index Fund (AGG) and iShares Goldman Sachs Investop Corporate Bond Index Fund (LQD) from 2004 – 2008 when the iShares S&P/CitiGroup International Treasure Index Fund (IGOV) was added.

So, here is how the portfolio performed over the years:

As you can see, 2008 was a tough year. The entire portfolio was down 16.75% that year. The domestic equity portion lost 36.99%, the international equity portion was down 40.50%, and the fixed income portion was up 4.89%.

I’ll provide a PDF of the year-by-year portfolios in a follow-up.

Topics: Exchange-Traded Funds, Index Funds, Retirement Planning | 3 Comments »

3 Responses to “Annual Review of the AFM iShares Retirement Portfolio”

  1. Paul Williams Says:
    April 18th, 2012 at 4:20 pm

    Why are you withdrawing 4% of the portfolio each year? Why not start with 4% of the portfolio in the first year and increase each year’s withdrawal by the appropriate amount of inflation for that year? That’s the kind of withdrawal formula the 4% rule works on.

  2. Joe Morgan Says:
    April 19th, 2012 at 7:24 am

    It took me minute to realize this is a portfolio for people who are retired, and not a portfolio for people saving for retirement…

    BIG difference there! 😉

  3. JLP Says:
    April 19th, 2012 at 4:51 pm


    I do it this way to try to keep from eating into too much principal.