I have been considering a conservative growth rate assumption of 3% for the account Bernini. It is a pension account, managed by a state investment board. The board uses a smoothing approach to returns - smoothing returns over a five year period. The returns in the past years have been dismal (and hence the 3% assumption), not because the fund was doing poorly - but because the effects of year 2008 were still being felt. Now that we are in 2013, we are out of the five year smoothing window for 2008 - so the growth rate in 2013 should be pretty decent.
Given the fast pace of market growth in the first two months, I am revising the Bernini growth rate assumption to 12% - or 1% per year. I will not be updating the existing Taking Stock posts - but future Taking Stock posts will reflect the upward revision of Bernini account balance for last two months.
Bernini now stands at 12 Units. The total portfolio value (including market growth in past few days) is now 50.5 Units.
No comments:
Post a Comment