While I have been equity investing in fits and starts since 1999, only since 2015 have I kept decent records. Monthly I plug my portfolio values and cash input/output to a spreadsheet to track my rate of return in a manner that allows direct comparison to the kind of performance tables marketed by the investment professionals. (I use the Bogleheads investment returns spreadsheet found here: https://www.bogleheads.org/wiki/Calcula ... al_returns)
My benchmark is cash as my risk averse wife would happily remain 100% cash if not prompted: my motivation for tracking performance was to persuade her that investing our capital would be more rewarding than stuffing it under a mattress.
At the end of 2019 I am pleased to report I am outperforming the mattress.
Trailing investor return (money-weighted return, internal rate of return)
Investor return as of 12/31/2019
Since* 12/31/2015 14.4%
Trailing portfolio return (time-weighted return, comparable return)
Portfolio return as of: 12/31/2019
1 month 1.2%
3 months 3.2%
6 months 4.3%
YTD 19.3%
1 year 19.3%
3 years* 13.2%
Annual portfolio return (time-weighted return, comparable return)
2016 33.9%
2017 23.0%
2018 -1.2%
2019 19.3%
(* denotes annual compound rate)
Comment: So we can see that while 2018 was disappointing in total return terms, I have had a very satisfactory 2019.
Portfolio
Berkshire Hathaway Inc. Class B | 1.1
BKG BERKELEY GROUP HOLDINGS (THE) PLC ORD SHS 5P | 1.4
Bmo Global Smaller Companies PLC | 1.3
Henderson Smaller Companies Inv Trst PLC | 4.5
Imperial Brands PLC | 1.9
LEGAL & GENERAL GROUP PLC ORD 2 1/2P | 2.4
Murray International Trust plc | 1.3
Royal Dutch Shell Plc Class B | 1.5
Rio Tinto plc | 1.8
Unilever plc | 0.8
Vanguard FTSE All-World UCITS (VWRL) | 15.2
WPP PLC | 0.7
FUNDSMITH EQUITY I INSTL ACC NAV | 12.3
VANGUARD LIFESTRATEGY 100 PERC EQUITY ACC NAV | 25.5
Royal Bank of Scotland Group plc | 0.1
VANGUARD FUNDS PLC VANGUARD FTSE EMERGING MARKETS UCITS ETF | 0.9
VANGUARD LIFESTRATEGY 100 PERC EQUITY INC NAV | 3.5
HURRICANE ENERGY PLC ORD 0.1P | 1.7
Polar Capital Technology Trust plc | 4.4
Fundsmith Emerging Equities Trust PLC | 1.2
Finsbury Growth & Income Trust PLC | 3.0
HarbourVest Global Private Equity Ltd | 2.4
Games Workshop Group PLC | 1.1
ISHARES FTSE 100 UCITS ETF | 6.3
SGLP Physical Gold | 1.2
Diageo plc | 0.9
IShares FTSE 250 ETF | 1.8
Cash | 0.1
| 100.0
The portfolio is currently ungeared.
.
The good:
My major strategy is to allocate my largest holdings to global trackers. This meant I captured the boom in equities.
Yet again it seems exposure to the American market was a good idea. My slight overweight to tech giants via Scottish Mortgage and later Polar Capital Tech ITs helped. (I switched out of SMT to take advantage of the discount/premium difference and was rewarded by a minor boost)
Other successful trading in the margins occurred around the gold price: I traded into and out of gold ETFs as the year progressed and have ended up ahead a small way. No particular plans to do the same in future. I will always keep a little gold exposure as insurance against collapse like Venezuela, I think. Enough to buy a ticket out of trouble, anyway.
Games Workshop: I finally got on the bandwagon, a full five years after I rejected them in 2015 as being analogue in a digital world. These rewarded with a rapid 30% rise in a month! Gotta be happy with that.
Henderson Smaller Companies gets a gold star for closing its habitual discount after many years. This is my favourite IT in these supposed Brexit end-times. I am tempted to sell and wait for the big discount to reassert itself, but it has done so well for me over a long period I am content to hold longer.
My largest active position, Fundsmith Equity has had a reassuringly decent year again. No plans to ever dispose of this.
The Bad
I started the year with a large allocation to Hurricane Energy ahead of a highly anticipated drilling campaign. The froth well and truly blew off over the year. I have reduced my position at 35p, accepting a big capital loss. What did I do wrong? Essentially nothing- it was a risky share that I had researched to death. I gambled on the drill bit and had the drilling results gone the other way I would have been congratulating myself on running the risk. Main takeaway was the value of limiting such speculations to a reasonable amount of capital, trusting the global trackers with the lions share of capital. I still hold Hurricane, and will follow the story with interest.
Emerging markets have not set the world on fire this year, and I am underwater on both my EM holdings : FEET (active) and VFEM (passive tracker).
I have been too bloody lazy to get rid of my final tranche of Murray International which happily put on a bit of a spurt towards the end of the year. Putting it into the bad column anyway.
Imperial Brands has continued to be a drag on portfolio performance in 2019. I am a long way underwater on it but am holding for the dividends.
WPP-meh. Why do I still hold this? No idea. Price anchoring, probably.
The ugly
The low point of my investing year was the moment I casually discussed Hurricane with a real-life friend of mine. He went ahead immediately and bought at a high price there and then. Subsequently he sold at a low and booked a stinking great loss. He was gracious enough to say it was his responsibility but such things can lead to ill feeling. We remain on good terms but the guilt I feel for opening my mouth about business will linger for a long time.
Never again will I discuss equities with a personal friend: good buddies are hard to find, and a close friendship is not worth risking in this way.
Well that was my 2019. Best wishes and good luck all for 2020. May Fortune be with you in your investing. Thanks for all your posts here at Lemon Fool.
JoB