Sources of historic annual return data

[foglifter]

I've ran into a weird issue: Morningstar and Yahoo show different annual returns for one mutual fund. I suspect this might be a matter of bad data in the Yahoo databases, as Morningstar's data is consistent with the fund provider's data.

Can you folks recommend any other good online sources of historic performance data for mutual funds (namely, annual total returns) besides Y! and M*? 

[AgAuMoney]

I usually compare yahoo with google.

AOL and MSN also used to have finance data but I haven't used them for ages.

For funds I treat the official page as the gold standard.

For everything traded on an exchange, the exchange has the official data.

[foglifter]

I usually compare yahoo with google.

Somehow I wasn't able to find the historic annual returns at Google Finance... if you did find them, can
you share the URL?

[AgAuMoney]

I don't see anything labeled "returns" or "performance."  I tend to just look at historical prices and build my own.

[foglifter]

So do you just add any fund distributions paid during the year to the price difference b/w the 1st and last day of a given year to get the annual return?

[AgAuMoney]

Basically.

It helps that the funds I'm interested in tend to have few distributions (most are annually if that, and a couple are quarterly).

For most funds I tend to rely first and mostly on data from the fund provider.  If their data is wrong for any extended period the SEC will be all over them.

Since the providers often will not update their official results as frequently as I would like, I then fill in the most recent data with information from yahoo and google finance.

I use morningstar primarily as a 3rd party perspective on the overall fund positioning in the market and comparison to others in that space.

However, it should be noted that the vast majority of my stock allocation is individual stocks.

[Pointedstick]

However, it should be noted that the vast majority of my stock allocation is individual stocks.

Buying the market (stock index) has always seemed a rather odd approach to me. If you were running a trucking firm and hired all-and-anyone drivers rather than being more selective as to who might actually be appropriate/good drivers for the firm, then its obvious which of two firms might outlast/perform the other. When it comes to stocks many investors are prepared to hire a basket of good-bad-and-ugly without question. Whilst some individually selected may turn out to be bad eggs in the basket, at least you tried to avoid/reduce that risk - which is better than not having tried at all.

Why not take this further and simply own only the asset that's performing best? You could ditch the bonds and gold when stocks are going gangbusters, and toss the stocks and gold and bonds are knocking down the barn doors. The problem, of course, is being able to do this without making catastrophic mistakes. I know that personally, I'm no good at picking stocks at all, and I suspect I would be similarly rubbish at picking broad asset classes, or at least gauging when the timing would be right to switch. The PP, at least for me, is more about acknowledging my ignorance of the best asset or the right time to move into it.

[D1984]

Why not take this further and simply own only the asset that's performing best?

If your investment horizon is 15+ years then there's the argument that all stocks can be a reasonable low risk choice. Using Kenneth French's data for Small Cap Value since 1927 to 2011, the worst 15 year period yielded a near 0% real return (spanned Wall Street Crash years). Otherwise the rewards were 'reasonable' (12.2% annualised real (after inflation) reward on average over 15 year periods).

Clive, the scenario of an investment in US SCV stocks right before the Wall Street Crash of 1929 is actually IMO closer to a "best case worst-case scenario" than a "worst case worst-case scenario" and should be judged thusly. See Ed McQuarrie's artice "The Stock Market's Little Shop Of Horrors" for examples of where all stock portfolios did horribly in absolute (nominal) and relative (to inlfation or to investing in government bonds) over periods for far longer than 40 years.

The article is avilable at http://harrykatz.com/JOI_Summer.pdf.

Before I'd even consider an all stock portfolio (even one that was well diversified across countries and tilted to SCV) I'd either have to:

A. Have a 40-50 year investment horizon and have assets/income/salary from a very stable job to live off of otherwise until I cashed it out (or perhaps if it was money that was set aside as a bequest/inheritance to others that I would never touch in the first place) or,

B. Be living off it it but be wealthy enough that I only had to liquidate perhaps 1.5% a year instead of the usual 3 or 4% so that I could ride out a multi-decade downturn if necessary (although in the Japanese case from 1990-2011 I think even 1.5% a year might have been pushing it).

All of the above is not even considering that if one has a 100% stock portfolio and one's county is invaded/loses a war or one's government confiscates paper assets (or electronically denominated ones since most stocks today are actually owned in brokerage accounts or retirment accounts and not as certificates i DPPs/DRIPs) then one is basically screwed while the person who had some hard assets like physical gold/silver, or even some hidden "folding money" (in various currencies in case one' s own currency becomes worthless due to hyperinflation) would be in a better off position than you were when all was said and done.

[AgAuMoney]

However, it should be noted that the vast majority of my stock allocation is individual stocks.

Buying the market (stock index) has always seemed a rather odd approach to me. ... Whilst some individually selected may turn out to be bad eggs in the basket, at least you tried to avoid/reduce that risk - which is better than not having tried at all.

Why not take this further and simply own only the asset that's performing best?

Because I don't know what asset is best.

And just like truck drivers, the best may differ day to day.

However I do find it fairly easy to identify bad and good.  So I hire (buy) good.

If I make a mistake and think something is bad when it is not, the cost is low, because I didn't buy.

If I make a mistake thinking something is good when it is not the cost could be high.  So it is to my advantage to error on the side of NOT buying/hiring.

And luckily the market makes that easy...  There are far more bad than good, and I only need a few good (about 50 is plenty for me, out of way more than 3000 in just the U.S.).

Thus instead of trying to identify the best (an impossible task), I only have to identify good.  And that is reasonably possible.  Or it has been for the past 20 years I've been doing it, and from my study the same approach has worked for over 100 years.  My biggest regrets are the times I've NOT followed this approach.

My approach is dividend growth investing.  I post with the same nom de plume on seeking alpha if you'd like more information.