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?
Summary Table
| Year | Initial | Injection | Sale | Dividend | Final | Returns |
| 2010 | $0 | $26,489 | $0 | $0 | $25,860 | -0.222 |
| 2011 | $25,860 | $32,487 | $0 | $2,209 | $55,555 | -0.014 |
| 2012 | $55,555 | $14,561 | $8,097 | $2,807 | $73,770 | 0.264 |
| 2013 | $73,770 | $43,519 | $0 | $3,717 | $138,550 | 0.283 |
| 2014 | $138,550 | $70,127 | $16,820 | $6,725.80 | $197,762 | 0.068 |
| Total | $187,183 | $24,917 | $15,459 |
====================
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.
Hi My15HWW,
Are you going towards indexing your portfolio?
Regards,
SG Physiotherapist
Hi SG Physiotherapist,
Perhaps? There’s zero indexing now, and there’s no doubt that the only way is up.
My15HWW,
Interesting to see how a relatively successful investor like yourself is looking towards indexing. Anw, I have enjoyed your blogposts. Thanks for writing!(:
Hi 15hww
Good to see you blogging more often these days 🙂
That’s a very respectable return there on the cagr and it will continue to perform as long as time allows good companies to fulfil their potential.
Hi B,
Abit of a lull time for me now. So more time to blog.
As for the returns, yeah, 14% is still pretty good over 5 years. But now, I guess I ain’t really chasing after higher returns anymore. With the portfolio a decent size now, I will gladly grab an average return of 10% per annum from this point onwards. =)
Good going mate! Chiong and huat ah! 😀
Hi pib,
Thanks for your encouragement! Let’s huat together!
Very interesting! And lol@ the wannabe part.
Are you planning to go into any overseas markets any time soon? My family is doing both China (which I know nothing about) and U.S.
I was convinced by Bogle, my husband swears by Buffett but ERE has made me very depressed and convinced that the whole economy is a sham.
Hi Singaporemm,
Yeah, overseas market is on the cards. But both the China and US market looks way overvalued compared to the local market. I actually sold some China ETFs almost a quarter ago. Urgh…
I feel that both Bogle and Buffett are right. Just that most people can’t replicate what Buffett believes isn’t too difficult, which points most towards Bogle. Depressed over ERE? I actually think Jacob is quite right with most of his analysis but instead of feeling depressed, I find it enlightening. Feeds my raging skepticism further. =p
Jacob makes me depressed because of the fractional reserve banking thing, if you know about it? http://www.relfe.com/wp/money/want-earth-plus-5/
In the end money is a sham 🙁 I mean GDP is measured by consumption but other than basic necessities what do we need to consume?? Nothing.
But then I guess we could still profit from others stupidity… Haha
Hi Singaporemm,
Firstly, I have a pretty scathing take on the “average person”.
https://www.my15hourworkweek.com/2013/08/16/you-wont-want-to-be-mr-average/
Since we are living in a capitalistic world, and there’s little we can do to change that, one has to learn the rules and play the game to your advantage. The basic principles of personal finance isn’t rocket science and if one chooses NOT to follow them, then there will be others who will like you say “profit from their stupidity”.
I do believe that no matter what is the prevailing system, some humans will always take advantage of others’ weaknesses.
15hww, impressive portfolio and CAGR, keep it up…
Hi Richard,
Hope it’s good going for you too!
Congrats to your good performance!
Hi Alvin,
Thanks! But nothing compared to those CNAV returns, eh? =p
Great progress on your portfolio all around. $500 in dividend income every month is a pretty solid number.
Hi Tawcan,
Thanks for dropping by and appreciate your kind comments. I just popped by your blog as well and is surprised I haven’t chanced upon it before. Will be taking some time to read through your archives over the next couple of weeks.
BC is a great place and let’s just say that I miss my half a year stay in Vancouver badly!