15HWW Annual Investment Performance Update: 2016

I started this journey in late 2010 and even after 6 years of investing in the market (hopefully not 1 year of experience repeated 6 times), I still regard myself as a beginner. Nonetheless, I would say that I am learning. If not more about the market, then at least more about myself. The stock market is notoriously one of the most expensive places to find out who you are and I really hope I don’t get hurt in the process!

This is the fourth year I am updating my annual investment performance on this blog and you can refer to the earlier updates in 20132014 and 2015.


What I Bought and Sold

This year was a really active year, with a total of 30 buy and sell transactions and the ratio is probably 2/3 in favour of buys as the stock portion comfortably exceeded $200,000 at the end of 2016.

I am still wheeling and dealing with my own personal picks with mixed results. Notably good and profitable trades in Ho Bee, UOL and DBS and a (on hindsight, poor) sale of Wilmar early in the year and of course, panicking and selling 2,000 OCBC shares on the day of Brexit at a low.

The decision to slowly build up the 15HWW Permanent Portfolio also paid dividends as I managed to scoop quite a bit of STI ETF and Berkshire B at low prices during the early months of 2016. I guess those were the big contributors to a very decent XIRR for 2016.

I have also bought 4 stocks using the methodology prescribed by Big Fat Purse and the goal in 2017 will be to build up more cash in order to provide more funds to execute this strategy.

 

Dividends

Interestingly, the dividends we received in 2016 actually decreased as compared to 2015 as we decided to sit on more cash after the bloodbath last year. Nonetheless, we still managed to receive a decent $6,000 from dividends which translates to a exactly $500 every month. Including the coupons from bonds and interest from our bank accounts, we probably have 2 months of expenses covered from these “relatively passive” income!

Investment Performance

My CAGR for 2016 came in at about 16% which helped alot to mitigate the -14% a year ago.

The CAGR from Oct 2010 to Dec 2016 (our investment journey thus far) has gone back to a much more respectable 7.0%.

More importantly, I am back sitting on profits of close to $50,000 gained from the market, a position I last enjoyed at the end of 2014 when the STI was much frothier at close to 3,500.

After all, it’s the absolute gains that matter. I would very much prefer a 10% return on $300,000 rather than 20% on $30,000.

Summary Table

Year Initial Buys Sale Dividends Final Returns
2010 $0 -$26,489 $0 $0 $25,860 -22.22%
2011 $25,860 -$32,487 $0 $2,209 $55,555 -1.40%
2012 $55,555 -$14,561 $8,097 $3,005 $73,770 26.81%
2013 $73,770 -$43,519 $0 $3,717 $138,550 28.31%
2014 $138,550 -$71,657 $16,820 $6,726 $197,762 6.79%
2015 $197,762 -$43,001 $65,183 $6,839 $142,640 -13.81%
2016 $142,640 -$148,013 $98,394 $5,950 $212,534 16.47%
Total -$379,727 $188,494 $28,444

All in all, I think I have managed the mini bear market of the last 1.5 years rather ok and I am also clearer of the strengths and weaknesses I possess during this somewhat trying period for me. It was definitely not easy making the transition from a well-paid employee to a budding self-employed when the market was tanking.

I would also admit that I have been pretty lucky thus far, avoiding big losses of any sorts.

And the odds of big losses would also be very much reduced with the new approach utilising different strategies. I am pretty confident it will give me best shot of attaining my financial goals in the long run.

And since I am segregating the portfolio into 3 parts, this will also be the last annual update in this format.

Let’s hope 2017 will be even kinder as I strive towards making $100,000 from the market.

And just in case there are no more posts for the rest of this week, wishing everyone a Happy Lunar New Year!

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