It’s been a year and a half since I last posted an annual update on my portfolio performance. How fast time flies.
When I first started the blog two years ago, I wasn’t really that interested in measuring my performance. Afterall, I had assumed that doing so had no tangible effect on the outcome of my investments. Which isn’t absolutely wrong. Knowing my exact returns definitely doesn’t change the outcome of the performance.
I only needed to know if the passive income could cover my expenses.
Nonetheless, I had to admit that it would be immensely useful to find out IF picking stocks and managing a portfolio myself produces a better return than passively investing the money in the STI Index. Otherwise, I might as well not waste time and effort and channel all the household’s financial resources towards the latter.
Therefore, I applied the CAGR calculation to my investment decisions and produced this post 1.5 years ago. Honestly speaking, I was quite surprised that my CAGR approached almost 20%. If this outperformance continued for another decade, we could probably semi-retire even without putting in another single cent into the portfolio.
But well, 2014 showed that the law of gravity applied to the market as well and it was a year that brought me back down to earth. The reality that I was probably “lucky” from 2010-2013 sank in. Yeah, I am just another super-investor wannabe. 😳
And even though this update is at least a quarter late, here’s the lowdown on 2014’s investment performance!
What I Sold
Sold 2 lots of SIA Eng @$4.50: Wrote extensively on this in one of the post and I still stand by that decision at this point in time.
Sold 2 lots of Singtel @$3.91: Likely to join a long list of bad sell decisions, even with the sudden news of a 4th telco. Aaaaaargh…
What I Bought
Too many to list. It’s been a busy year on the buying side, especially after liquidating the Sharebuilder plan.
You can refer to the 2014 transaction page for the full breakdown.
But if I had to summarise, the trend in 2014 was buying blue chip stocks like OCBC, Dairy Farm, SGX, ST Engg and Sembcorp. Which somewhat came to replacing the Sharebuilder plan. Daft, isn’t it?
And the decision to add on to my MTQ stake just before the oil price rout proved to be everything but a midas touch. *Yucks*
Dividends in 2014
On a happier note, we received a decent $6,700 from dividends which translates to a little more than $500 every month. 2 months of expenses covered! And that’s also almost a 100% increase from 2013 too!
Investment Performance in 2014
My CAGR for 2014 came in at about 6.8% as compared to STI’s return of 9.5%. That’s an under-performance of a considerable magnitude. Besides MTQ, notable culprits that pulled down the performance of the portfolio included Semb Corp and Super Group. But still, at least it’s positive, no?
After accounting for the divestments and dividends, the gains total to about $51,000 from a capital of $187,000.
In other words, the market needs to tank 25% (i.e. STI probably got to go down to 2,500) to wipe out all the gains I have achieved thus far? The US and China market explosion has not really dragged the local index up, but will their implosion bring us down together? That’s anybody’s guess. 🙄
With the less than decent/below average returns in 2014, the CAGR from Oct 2010 to Dec 2014 (our investment journey thus far) is also now a much more reasonable 14.1%. Still an outperformance, but not as significant anymore. But actually, that’s to be expected as I turn more conservative with a bigger portfolio.
But still, we are hoping mean reversion trend will not continue in 2015. Otherwise, following Buffett or Bogle wouldn’t make any difference.