Portfolio Update April 2014Posted: May 20, 2014
This is the first month of a real portfolio update since November 2012. I have effectively ignored my portfolio for the past 16 months. That said, how did we fare?
Here we have the monthly performance for the past 12 months. Reviewing the results, for the past 12 months I have beat my benchmark for 9 out of 12; so 75% of the time. Not bad. More importantly, my Sharpe Ratio has been positive, which means that, on a risk adjusted basis, I am making gains, also important!
How about the trailing twelve months?
You’ll notice that there are no results for May 2013-November 2013; this is because I haven’t entered enough historical pricing information for the portfolio, so I don’t have any results for those periods. For my May 2014 update, I should have a full TTM graph available. However, for months where I have data, I have beat the benchmark handily.
Finally, the asset allocation..
As suspected, I am heavily weighted in equities, and my fixed income exposure is definitely below the acceptable range: equity is over by 28.5% and fixed income us under by 19.0%. I am making a concerted effort to fix that in the coming months by reallocating cash towards fixed income.
Some notes on all of this..
While I have effectively ignored my portfolio, I did make some calls based on research for my courses (Value Investing saw me purchasing Logsitec (Class B) and Rock-Tenn Paper Corp. Logistec is up 39.3% since I purchased it in the fall of 2013; Rock-Tenn hasn’t been doing so well but I am patient). I’ve also taken some money off the table to pay for my wedding and unwind some debt.
I’ve also revisited my benchmarking. Before I compared myself against five benchmarks: three Couch Potatoes, XIC, and XIU. This was silly, and it was merely a numbers game. The results going forward will be based off of a new benchmark composed of 20% Canadian Equity, 20% US Equity, 20% International Equity, and 40% Canadian Fixed Income. If I were a truly passive investor, this is what I would be investing in. If I come up on new portfolios that may interest me (e.g. Fundamental Indexing) then I’ll switch things up, but I am taking a more realistic approach: what would I invest in now if I was passive? This means that, if I switched later to Fundamental Indexing I would not retroactively compare my returns. This will give me a better snapshot of how my real performance ranks against what I might have done if I was purely an ETF investor.
Finally, I have been giving some thoughts to how to measure performance vis-a-vis making actual trades. I do some funky math right now to generate returns on a monthly basis when taking trades into consideration, but I am going to see if I can rework my workbooks to use a Modified Dietz approach, and then link those together for the TTM. Hopefully I can squeeze that in for the May or June update.