Surprised by the performance of my real money portfolio
I just completed my quarterly assessment of my real money stock portfolio which I have done for the last five years. Here are my results (investment returns are not inflated by new contributions and frictional costs of capital gains taxes have been deducted from my performance) for each quarter alongside the DJIA and the S&P 500.
Date DJIA % quarterly gain S&P 500 % quarterly gain My Portfolio % quarterly gain
3/30/04 (.84) 1.27 6.05
6/28/04 (.1) .65 (2.65)
9/30/04 (2.67) (1.66) 16.1
12/31/04 6.97 8.73 1.83
3/31/05 (2.52) (2.52) (4.78)
6/30/05 (2.25) .84 (.36)
9/30/05 2.86 3.15 (2.45)
12/31/05 1.41 1.59 6.92
3/31/06 3.66 3.73 3.66
6/30/06 .92 (1.46) 0.00
9/30/06 4.17 4.7 5.99
12/31/06 7.55 6.81 8.10
3/31/07 (1.65) (.41) 1.35
6/30/07 9.20 6.53 3.00
9/30/07 4.5 2.26 0.00
12/31/07 (6.00) (5.3) (5.6)
3/31/08 (6.99) (9.37) 0.00
6/28/08 (7.52) (3.52) (3.1)
9/30/08 (7.05) (11.16) 11.04
12/31/08 (17.36) (20.97) (21.44)
3/31/09 (13.13) (11.37) (4.42)
Here are approximations for the value of $10,000 today if it were invested in both indexes and in my portfolio at the start of 2004 when I began tracking my performance. Since my results include dividends, I did a little bit of hand waving by adding $1000.00 to both the end value for the DJIA and S&P 500 to assume a 2% dividend yield compounded annually over roughly five and a half years.
Value of $10,000 invested in the DJIA: $8275.13 which amounts to approximately a 2.5% compounded annual loss.
Value of $10,000 invested in the S&P 500: $8332.19 which amounts to approximately a 2.5% compounded annual loss.
Value of $10,000 invested in my portfolio: $11421.12 which amounts to approximately a 2.5% compounded annual gain.
I am happy to say that I have outperformed the market by about 5% a year but sad to say that I may have slightly underperformed the risk free return of CD’s.
Year to year my portfolio looks somewhat different as I occasionally replace a holding or two. My investment style is probably 80% Buffettology and Foolishness and 20% Jim Cramer. As you can see by my cash position below, I favor the Peter Lynch philosophy of being all in stocks all the time. Going forward, however, I may give consideration to some non stock holdings should the market ever become insanely overvalued again in my lifetime. Here is how my entire stock portfolio is currently allocated.
JP Morgan Chase stock (JPM): 23.86%
Marvel Entertainment stock (MVL): 17.13%
Buffalo Wild Wings (BWLD): 12.76%
Large Cap Mutual Fund (somewhat mirrors S&P 500): 12.4%
Berkshire Hathaway (BRK/B): 10.93%
Conoco Phillips (COP): 7.66%
Gamestop (GME): 4.34%
Nintendo (NTDOY): 3.54%
Coach (COH): 3.26%
General Electric (GE): 2.45%
Cold Hard Cash: 1.71%
The reason I have so much JPM stock is I worked for them and acquired the stock through a 401K and a stock purchase program. I may reduce my weighting in JPM a little bit simply for diversification purposes. I also don’t like index funds because I don’t like owning a bunch of crappy companies just to own some good ones. But I have some money in a large cap fund that is very much like and index fund through a 401K which has limited investment options. Over the next few days I will probably take a little bit of money off of the table for a couple of my holdings that have run up too high in price and put that money to work in some more undervalued stocks.
Overall, I am relieved that my portfolio is treading water in such treacherous market conditions and have no regrets about being in stocks. I don’t think I could have learned as much about investing if I didn’t choose to stay in the game the whole time.
Thanks for indulging me by reading my blog. What do you think about my current portfolio?