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Helical Portfolio - First Year Reveiw II



January 05, 2012 – Comments (0) | RELATED TICKERS: JNJ , CAH , BRLI.DL

Helical Portfolio - The First Year - Review part 2


There is an exercise I like to run each year to evaluate MY investing performance.  When I speak of my performance, I mean 'me', not the portfolio.  I already noted that the portfolio had a good 2011 both in overall terms and in comparison to the investing environment.  But did I contribute to that performance, or was it an accident of fortune?  I can't completely rule out the 'luck' aspect, but I can review whether I added value or not in 2011.  Some may recall I did this last year here with my IRA*.


The way I review this is to pull (as in download and print) my account statement from the close of 2010, and determine what the account would be worth if I had done nothing at all.  I was pretty active in the Helical portfolio this year, and the question needs to be asked as to whether that was helpful or detrimental.  Investor psychology being what it is, high activity is more often a bad thing than good.


First there is the self imposed hurdle to consider.  Being active had frictional costs in the form of trading fees.  All told, these were $344.72 in the Helical Port in 2010, or better noted as 0.67% of the starting value of the account.  That's higher than I would like and it was a bit daunting to look back over the year and see just how many trades were made (48).  My self inflicted expense level is better than a typical mutual fund expense ratio, but higher than an index tracking ETF cost.  If it was over 1%, I'd say I had a problem.


Here is what the portfolio looked like at the start of the year, and what it would be worth today if I had done nothing at all and collected dividends as cash.

                    Shares     EOY                Dividends

                                    Value                   Paid

Cash                           $2,754.01

BRLI              150        $2,440.50

BIO                  20        $1,920.80

CVS                 75       $3,058.50             $37.50

CAH                 70       $2,842.70             $58.80

CPHD            300      $10,323.00

EXEL             300        $1,422.00

GHDX            200        $5,078.00

JNJ                  90        $5,902.20          $202.50

KNDL             300        $4,575.00

MDT               100        $3,825.00           $95.40

NVS                 50        $2,858.50         $117.65

PPDI              200        $6,650.00           $90.00

SGEN            150        $2,508.00


Total                          $56,760.06


So, if I had been completely inactive in 2010, instead of making the 48 transactions that I did over the course of the year.  Then I would be better off by $400.48, and had an annual return of 13.1%, which is 0.9% better than I actually did.  So, my activity destroyed value, and by just slightly more than the frictional costs it created.


So much for patting myself on a good year huh?  I'm not particularly upset about this, since as noted it was still a good year, and some aspects of the activity were related to risk mitigation which can be the right thing to do even when it appears wrong with a snapshot of hindsight.  This portfolio is aggressively invested (for me anyway), and erring on the side of caution, such as the couple of times in 2011 that I went heavy into cash should serve me long term (we'll see).  I'll consider and review select individual moves and see if I can learn from them (and post about it).




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* - This blog is now about my Roth, which is invested fully in healthcare, the sector I have always focused on in CAPS.  But, I will note that last year I talked about my IRA, and this year I did not add value in that larger account either.  That account was flat for the year (up a couple hundred dollars), largely due to some poor impulsive decisions I made mid year. 

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