As 2015 is coming to an end, I am interested to see how well I did, especially since this is the first year where I had sufficient surplus to invest seriously in the stock market. I am especially interested to know how well I fared against a form of benchmark.
In a previous article, I suggested that an easy and good way for anyone to start investing is via ES3, an Index ETF tracking STI. The truth is, while I did buy some ES3, I also bought many other stocks as part of my portfolio because I thought that I could perhaps do better than the market (i.e ES3).
So how did I fare against ES3? I measured it in two dimensions: returns and risk.
For returns, I chose time-weighted returns as I inject new money into my portfolio irregularly and I do not want that to distort my comparison. Also, it is the preferred way to measure the skill of investment managers. As for risk, I am using the monthly standard deviation of the portfolio as a measure of how volatile my portfolio has been.
Based on the time period from 23 Jan 2015 (my first stock purchase this year) till 22nd Dec 2015, the time-weighted returns of my portfolio is -14.59% while ES3 is -13.67%, and the monthly standard deviation of my portfolio is 2.96% and 3.42% for ES3. While I did achieve lower risk with diversification mainly via iAssist and iSuggest recommendations, they also generate slightly poorer returns. I would say that this results is at best on par with the market, but to be honest I am rather disappointed. I had hoped for better returns with lower risk than the market. Looks like I have found my New Year’s resolution for 2016!
Luckily, I started inject even more money into my portfolio after the market downturn in August and September. So, my simple P&L (current portfolio value / total invested amount) is only at -6.6%. Hopefully, I have bought several “good” stocks at a cheap price this year which will benefit me in the long run. One indication of that might be happening is that my portfolio current dividend yield based on average cost is at a good 6.29%.
As usual, when I do something new, I will also add them to SGXcafe so that everyone else can also use it too. So, if you have your portfolio on SGXcafe, you can easily see all these statistics here. If you do not have an account on SGXcafe, sign up for free now!
Note: I include dividends in the computation for time-weighted returns as it should be.