Portfolio Update April 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?

Monthly Performance 2014-04

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?

TTM Performance 2014-04

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..

Asset Mix Allocation 2014-04

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.

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