| Realized Long-Term Gains/(Loss) | 5.98 |
| Realized Short-Term Gains/(Loss) | 7.4 |
| Unrealized Gains/(Loss) | 20.85 |
| Dividends Received | 6.35 |
| Total Realized Return | 19.73 |
Even though we rate the performance satisfactory as it beat the S&P 500 by a significant margin, there are several areas for improvement:
- Trading activity was on the high side in the latter half of the year. There were 31 trades that included 18 purchases and 13 sales transactions. A few of these transactions were very short-term so as to capitalize on the volatility certain stocks experienced. Keeping the frequency of trades down will free up time spent researching stocks that are quickly sold, not to mention transaction costs, and the tax-impact on short-term gains.
- Average holding period for the stocks in the portfolio is on the low side at around a year, considering that we have been investing for more than ten years. The target is to get that number to be well above the five-year mark. Obviously it is going to be a while before we achieve that.
- Exposure to major industrials such as utilities and metals are missing from the portfolio. These are very significant areas and a well-diversified portfolio should not be lacking them.
- The number of stocks in the portfolio has increased from 13 in the middle of the year to 17 as of the end of the year. The number of stocks should ideally remain between 15 and 20. Holding a large number of stocks has the double negative of the need to know and to keep track of more companies while reducing the invested assets per company as the total amount is invested amongst a larger set of stocks.
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