Update on the 2007 Presidential Dollar Coins

Back in February I wrote about how the new Washington Presidential dollar coins were hard to find. Since I wrote that post, I returned to bank branches on several occasions and was finally able to obtain a $25 roll of these dollar coins. I am going to hold on to the roll and do not plan on opening the roll to see if there are and mis-strikes or error coins in the roll at this time.

I have yet to see any of the new dollar coins in circulation at any place other than at banks. It's pretty clear to me that people are hoarding these coins without any intention of using them as currency. I expect to eventually receive some of these coins in change at a postal stamp vending machine, but I would be very surprised to see them anywhere else other than at a coin shop.

A few months ago there were many articles being published about the new dollar coins and how they last far longer than paper dollars and that the maintenance cost of a dollar coin supply is therefore far less than that of a paper dollar coin supply. Many of these articles hinted at the possibility that these coins might eventually become widely used by shoppers. I honestly cannot see that ever happening. Paper dollars are far easier to carry in a wallet and take up less space and weigh far less. Dollar coins will probably never be viewed at anything other than a novelty unless or until the government abolishes paper dollars.

March 2007 Returns For My Model Long-Term Portfolio

My Hypothetical Model Portfolio performed fairly well during March. As of the market close on March 30, 2006, the Hypothetical Model Portfolio was up $2159.30, or about 1.48% during March. The Hypothetical Model Portfolio is now up about $2243 in 2007, a gain of 1.54%, as shown on the table below (click for a larger image of the table).

Foreign holdings were the best performers, with the iShares Emerging Markets ETF (EEM) rising an impressive 6.15% and the Vanguard Developed Markets Index mutual fund (VDMIX) rising 2.58%. Several other holding rose more than 1% in March, including (a) iShares Dow Jones U.S. Select Dividend Index Fund (DVY), which rose 1.44%; (b) Vanguard Small Cap Index (NAESX), which rose 1.22%; and (c) Vanguard Index 500 mutual fund (VFINX), which rose 1.11%.

Unfortunately, however, negative performances were turned in by two holdings. The Templeton Russia closed-end fund (TRF) fell about 0.61% and the S&P 500 Financial components ETF (XLF) fell about 0.48%. TRF finished March down 19.35% so far during 2007. As I have previously discussed, TRF's performance is odd because its underlying net asset value ("NAV") has actually risen about 6.7% (from $63.23 to $67.48), but it share price has fallen because its premium has plummeted from 38.07% at the end of December 2006 to 4.34% at the end of March 2007.

Six of the holdings in my Hypothetical Model Portfolio paid dividends in March. As I mentioned in a previous post, the dividends from mutual fund holdings are reinvested, but the dividends from ETFs or a closed end fund (i.e., the Templeton Russia closed-end fund (TRF)) are not reinvested- they will accumulate as "CASH" on the performance table below until at least $100 has accrued, at which point that money will be reinvested in one of the mutual fund holdings. The reason I am doing this is because the index mutual funds in this portfolio do not charge a transaction fee for reinvesting dividends. To reinvent dividends for any of the ETFs or TRF, on the other hand, would cause me to incur transaction fees for the trading commissions.

VFINX paid a dividend of $0.55/share (a total of $134.36), which was reinvested on March 23rd to purchase an additional 1.016 shares at a price of $132.20/share. The Vanguard Mid Cap Index (VIMSX) paid a dividend of $0.005/share (a total of $5.75), which was reinvested on March 21st to purchase an additional 0.276 shares at a price of $20.86/share. The Vanguard Small Cap Value Index (VISVX) paid a dividend of $0.013/share (a total of $13.37), which was reinvested on March 21st to purchase an additional 0.762 shares at a price of $17.54/share. NAESX paid a dividend of $0.006/share (a total of $3.22), which was reinvested on March 21st to purchase an additional 0.095 shares at a price of $33.95/share. The iShares Dow Jones U.S. Select Dividend Index Fund (DVY) paid a dividend of $0.55956 on March 29th (a total of $55.96), which was moved to "CASH" on the table shown below. Finally, the S&P 500 Financial components ETF (XLF) paid a dividend of $0.148 on March 28th (a total of $14.50), which was moved to CASH.

*The Hypothetical Model Portfolio was created with an investment of $100,000 in securities as of the closing values on December 30, 2005 and an additional $25,000 was invested n securities as of the closing values on December 29, 2006. The reason why the total cost in the chart is greater than $125,000 is because the total cost accounts for the value of distributions reinvested into the mutual funds in the portfolio.

February 2007 Returns