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Hi, all. I hope you had a happy and healthy year in 2025, and that you had a satisfactory return on your investments. I wish you the same for 2026 and beyond. Here are some benchmark returns for 2025 and 2000-2025 (26 years) that you may find helpful for comparison. As always, each individual's return will probably depend primarily on their asset allocation, and to a lesser degree on individual security selection. Were they 90% stocks/10% bonds as Buffett recommends, or were they their age in bonds (76% for someone my age).

period, S&P 500 return, BRK.A return, 3-month T-Bill return

2025, 17.9%, 10.9%, 3.7%
2000-2025, 8.1%, 10.5%, 2.8%

In my own case (I don't mind revealing if it illustrates the point about asset allocation) I had a poor return in 2025, as I was allocated 31% in stocks (basically BRK.B)/68% T-Bills and 1% cash, for a total portfolio return of 6.4%. For the period 2000-2025 I did better. I slid down the asset allocation glide path from 52% stocks in 2000 to 31% in 2025, with a few significant excursions, such as 92% in stocks in 2009 (after the crash). For the 26-year period my total portfolio underperformed the S&P 500 by 1.6 percentage points, 6.5% versus 8.1% for the S&P, but my stocks outperformed the S&P 500 by 1.5 percentage points, 9.6% versus 8.1% for the S&P. I hope that my stocks (basically BRK.B) will continue to outperform the S&P 500 as I continue to reduce my allocation to stocks. Wish me luck.

Happy New Year,
rrr12345

Here's some more perspective. I used to track the performance of value funds. For the 27-year period 1996-2022, the returns of 12 well known value funds ranged from S&P 500 minus 2.3 percentage points (8.2% after fees versus 10.5% for the S&P) to
S&P 500 plus 1.0 percentage point (11.5% after fees versus 10.5% for the S&P 500). One-year returns have a very wide range, but 27-year returns have a very small range.

Let us know the value fund names and I’ll throw them on a chart. Be interesting to see how they’re doing.

"Let us know the value fund names and I’ll throw them on a chart."

S&P 500, 1995-2022, 10.52% return
Vanguard Value Fund Index (VIVAX), 9.47%
Tweedy Browne Value Fund ((TWEBX), 8.20%
Third Avenue Value Fund (TAVFX), 8.20%
Sequoia Fund (SEQUX), 11.53%
Dodge & Cox Stock Fund (DODGX), 11.30%
Clipper Fund (CFIMX), 10.39%
Legg Mason Value Trust, now ClearBridge Value C (LMVTX), 9.12%
Weitz Value Fund (WVALX), 11.01%
Muhlenkamp (MUHLX), 8.22%
Vanguard Windsor Fund (VWNFX), 10.21%
Gabelli Equity Income Fund (GABEX), 8.59%
Oakmont I Fund (OAKMX), 11.11%

Oops. That should read 1995-2020, or 26 years.

Well done.

I didn't start tracking book value* of the household in earnest until the beginning of 2007 so have only 19 years of data. In the first 18 of that, I had a book value CAGR of 18.1%, and am very happy with that outcome, which is roughly 6% higher than the S&P. Last year was behind the S&P which was fine, as I retired almost at the start of 2025, and not chasing beating the index any longer.

Here's to great outcomes in 2026, but I'm thinking "modestly decent" is the most likely outcome given the very high PE of equities across the board.

*I wish BRK would go back to that, or do that and market cap, but I'm not on that committee...

CAGR of 18.1% over the 18 years ending Dec 2024. That's great! Congratulations. That's actually 7.6 percentage points better than the S&P with dividends reinvested. (Just to be sure that I understand correctly, I have no doubt that you calculated CAGR correctly, but were contributions accounted for in the same way that mutual funds account for contributions, with the net asset value of the "shares" of the household adjusted using the price on the day of the contribution?) I'm glad that you track your performance. So many people don't. Good luck in 2026 and beyond.

Just to add a couple more comparisons, I estimate Berkshire's equity portfolio had a CAGR of about 9.8%/yr over the 25 year period 2000-2024. Book value per share over the same period increased by an annualized 10.5% per year.

"*I wish BRK would go back to that, or do that and market cap, but I'm not on that committee..."

I agree. I realize that BVPS is affected by share repurchases, but so far BVPS growth has remained a good measure of IV growth. I keep a spreadsheet of book value, market cap and shares outstanding going back to Oct 1964, the fiscal year end in 1964.

"CAGR of 18.1% over the 18 years ending Dec 2024. That's great! Congratulations."

Do you mind sharing some of the secrets to your success? Were you heavy in equities, and especially in NVDA or the like? I know some good investors, better than me, but I don't know anyone with an 18% return over 18 years.

"Let us know the value fund names and I’ll throw them on a chart."

I tried Perplexity - very disappointing - it could not give me CAGRs for a list of tickers. It could give step by step instructions how to get them.
Err, yeah, isn't doing the drudgery what AIs are supposed to be good at?

Unfortunately, StockCharts only goes back to 1/4/1999, and have to show in two batches:

Batch 1:
VFINX,BRK/B,VIVAX,TWEBX,TAVFX,SEQUX,DODGX,CFIMX,LMVTX

https://stockcharts.com/freecharts/perf.php?VFINX,...

Dodge & Cox the winner (+1124%), then Berkshire (979%), Sequoia (+844%), S&P500 (+796%).
Tweedy Brown & Legg Mason fighting for the losing spot (+299%).


Batch 2: added Longleaf Partners fund which I used to own:
VFINX,BRK/B,WVALX,MUHLX,VWNFX,GABEX,OAKMX,LLPFX,FAIRX

https://stockcharts.com/freecharts/perf.php?VFINX,...

Oakmark the winner (+1075%), then Berkshire (979%), Vanguard (+961%), S&P500 (+796%).
Longleaf the loser (+330%).

Some really shockingly bad performance from Tweedy Brown, Legg Mason, Longleaf (of course), Weitz, Gabelli and Muhlenkamp.

Looks like we did alright with Berkshire ;-)

Thank you for the nice charts, AdrainC. They make it easy to slide to see any sub-period, such as 2020 or 2025. We can also see at a glance the wide range of one-year returns versus the narrow range of 27 year returns. I have a chart (that needs updating) which shows the returns versus the number of trailing years. It looks like a trumpet, with a typical range of 30+ percentage points for one trailing year and about 4 percentage points for 25 or more trailing years. Never be too impressed with 1, 3, 5 or 10 year trailing returns.

Back to the question of asset allocation: Buffett recommended 90% S&P 500 index and 10% short term Treasuries, while Bogle recommended a bond percentage equal to one's age (76% for me). Quite a difference. A Kelly analysis which I posted here before (Sorry, I have to look up the reference.) recommended an allocation based on the percentage points by which one expects stocks to outperform T-Bills. It came down to:

expected stock return minus T-Bill return (percentage points), allocation to stocks

4 percentage points, 100% stocks/0% T-Bills
3 percentage points, 75% stocks
2 percentage points, 50% stocks
1 percentage point, 25% stocks
0 percentage points, 0% stocks/100% T-Bills

I expect the S&P 500 to return about its earnings yield over the next 5-10 years, or 3.5%, and T-Bills to return about their current yield, 3.5%, so if I followed this analysis I would have 0% allocation to stocks and 100% allocation to T-Bills.

Therefore the best allocation for me is somewhere in the range of 0% in stocks (Kelly analysis) or 90% in stocks (Buffett recommendation). Well that sure narrows it down :)

Here's another look at those value funds. Data from https://testfol.io/

Value Funds 1995-01-03 - 2025-12-31 CAGR total return
Berkshire (BRK-A)	        12.36%
Dodge & Cox Stock Fund (DODGX)	11.65%
S&P 500 (VFINX)	                11.01%
Oakmont I Fund (OAKMX)	        10.92%
Vanguard Windsor II (VWNFX)	10.65%
Weitz Value Fund (WVALX)	10.23%
Gabelli Equity Inc Fund (GABEX)	10.14%
Vanguard Value Indx (VIVAX)	9.85%
Legg Mason Value Trust (LMVTX)	9.43%
Third Avenue Value Fund (TAVFX)	9.27%
Muhlenkamp (MUHLX)      	9.10%
Longleaf Partners (LLPFX)	8.15%
Tweedy Browne Value ((TWEBX)	7.99%
Sequoia Fund (SEQUX)    	4.97%

https://testfol.io/?s=5DPgBUi1W5x
Data for Clipper is bad.

Beating the S&P500 has been difficult. That's not to say the fund managers haven't been personally successful, they all have ;-)

"Sequoia Fund (SEQUX) 4.97% "


Wow, how the mighty have fallen.

Therefore the best allocation for me is somewhere in the range of 0% in stocks (Kelly analysis) or 90% in stocks (Buffett recommendation). Well that sure narrows it down :)

I go with Buffett, almost.
- Not quite so sure about American dominance going forward: have a portion in international stocks.
- Expect governments to inflate away some debt: very little in long and intermediate term bonds.
- Do have ibonds, but we can only buy a piffling amount ($20k/year).
- Been market timing/valuation timing a bit lately and have about 15% in cash.
- Majority in stocks (productive assets). If stocks drop 50% we will still be just fine.

- Not quite so sure about American dominance going forward: have a portion in international stocks.

Which countries do you think will dominate going forward?

- Expect governments to inflate away some debt: very little in long and intermediate term bonds.
- Do have ibonds, but we can only buy a piffling amount ($20k/year).

TIPS are generally better than I-bonds, especially if you expect inflation rather than deflation. There's also no limit to the amount of TIPS you can buy each year.

“Which countries do you think will dominate going forward?”

Not a clue. So own them all. Have 3 ex-US ETFs: AVIV, AVDV, VXUS. Large value, small value, blend.

Fortunately, we don’t need 18% CAGR (!!). 3 or 4% real will keep us in the style to which we are accustomed and leave a pile for the kids.

I-series savings bonds are not “bonds” as such. They’re tax-deferred, deliver a bit above official inflation. A good spot for an emergency fund. And can be used tax-free for education expenses. We will be cashing some in later for the kid’s school when her 529 expires.

I-series savings bonds are not “bonds” as such. They’re tax-deferred, deliver a bit above official inflation. A good spot for an emergency fund. And can be used tax-free for education expenses. We will be cashing some in later for the kid’s school when her 529 expires.

I still own some old I-bonds from the halcyon days of 3%+ real returns. They will all mature in 2030-2032 if I recall. I would use them for [grand]children's education, but my AGI in those years is very likely to be too high. Even just $20k of I-bonds purchased in 2001 will probably be worth something like $60k+ in 2032, so just by virtue of maturing, it'll add a substantial amount to MAGI which makes it almost impossible to qualify for tax-free treatment. I will investigate taking the bulk of the gain a year or two earlier (you can choose to pay tax on I-bond interest as it accrues), but I suspect that too may not be worth doing because it'll only leave a very small amount remaining to be tax-free for education. Or maybe there will be a way to shrink income in those years, but every time I attempt to do that, something pops up to prevent it.

Yeah we have some iBonds from 2001 also.

Made me look:
“Income Limits: Your Modified Adjusted Gross Income (MAGI) must be within the IRS-specified limits for the year you redeem the bonds. For 2025 redemptions, the exclusion begins to phase out for MAGIs above $149,250 (joint returns) and $99,500 (other returns), and is fully phased out at $179,250 and $114,500, respectively.”

I plan to be more or less retired by the time we cash them in. Will be managing taxable income to under 400%FPL for ACA subs. Should just work out.

Will be managing taxable income to under 400%FPL for ACA subs. Should just work out.

In theory yes, in practice not necessarily.

Let's say you are managing your annual income each year perfectly well. Staying below the ~$150k cutoff, maybe even comfortably below it. BUT now look at those I-bonds more closely. They ALL are maturing in 2031, all $20,000 of them. Now, today, $20,000 of 2001 I-bonds are worth $76,000. In 2031, they will be worth more than that. Maybe $100k or close to it. So, when they mature that year, you will have an additional amount of interest of $100k - $20k, or $80k. Add this $80k to your usual 2031 income, and BOOM, suddenly you don't qualify for the "educational use" exclusion.

Let's say you are managing your annual income each year perfectly well. Staying below the ~$150k cutoff, maybe even comfortably below it. BUT now look at those I-bonds more closely. They ALL are maturing in 2031, all $20,000 of them. Now, today, $20,000 of 2001 I-bonds are worth $76,000. In 2031, they will be worth more than that. Maybe $100k or close to it. So, when they mature that year, you will have an additional amount of interest of $100k - $20k, or $80k. Add this $80k to your usual 2031 income, and BOOM, suddenly you don't qualify for the "educational use" exclusion.

Sure, it'll be a juggling act. We will cash some in early - even med school isn't costing $100k/year (about $60k).

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