In this post, I will examine the performance of my direct shares portfolio over the past four months. As I mentioned in my first post, I bought my first ever stock about three years ago. I have had satisfactory returns over that period, but I feel this has as much to do with luck as any particular skill. Over those three years, I did a great deal of reading and started taking my investing more seriously.
In August this year, I felt my knowledge and skills had improved to the point where I might be able to beat the broader share market over a period of, say, three to five years. So, on August 3, I set out towards the goal and bought the first shares in the Generals and Workouts (G&W) portfolio. My results over the four-month period are summarised in the table below.
I unitised the portfolio to assist in calculating performance. (There is a good post on the Monevator blog explaining the process.) There are two reasons for doing this: firstly, it makes tracking performance against a benchmark simple; second, it's free. Portfolio software like Sharesight can be neat, but I prefer not to spend hundreds of dollars in subscription fees.
In August this year, I felt my knowledge and skills had improved to the point where I might be able to beat the broader share market over a period of, say, three to five years. So, on August 3, I set out towards the goal and bought the first shares in the Generals and Workouts (G&W) portfolio. My results over the four-month period are summarised in the table below.
August 3, 2017
|
November 30, 2017
|
Since Inception
|
Annualised
|
|
G&W Portfolio
|
1.0000
|
1.0340
|
3.40%
|
10.43%
|
Benchmark (SPAX2F0)
|
61,250.80
|
65,037.65
|
6.18%
|
18.96%
|
I unitised the portfolio to assist in calculating performance. (There is a good post on the Monevator blog explaining the process.) There are two reasons for doing this: firstly, it makes tracking performance against a benchmark simple; second, it's free. Portfolio software like Sharesight can be neat, but I prefer not to spend hundreds of dollars in subscription fees.
A few other things to note:
- The returns are pre-tax, include franking credits and assume dividends are reinvested.
- The benchmark I have chosen is the SPAX2F0 — the S&P/ASX 200 Franking Credit Adjusted Annual Total Return Index (Tax-Exempt).
The SPAX2F0 is simply the ASX200 index adjusted for franking credits. By using it, we are able to fairly compare our returns including franking credits to the experience of investing in the ASX200. Franking credits are an important, and often under-appreciated, component of the returns of Australian investors.
As of November 30, the G&W portfolio is trailing the benchmark by 2.78%. This is neither surprising nor concerning. I suspect, as is often the case with investment programs focused on capital preservation, that outperformance will come in periods where the broader market declines. I hope to keep updating the portfolio's performance monthly.
Until next time …
As of November 30, the G&W portfolio is trailing the benchmark by 2.78%. This is neither surprising nor concerning. I suspect, as is often the case with investment programs focused on capital preservation, that outperformance will come in periods where the broader market declines. I hope to keep updating the portfolio's performance monthly.
Until next time …
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