01 January 2017
By Maynard Paton
Happy 2017! I trust you have enjoyed a successful year’s investing and that you continue to find my Blog useful.
I’m currently celebrating my second anniversary as a full-time investor — and I must admit to mixed feelings about how things have turned out so far.
True, I enjoyed a successful 2015 with my portfolio gaining 18%. But 2016 saw my investments collectively languish against a market buoyed by rebounding miners and post-Brexit USD-earners.
I have to confess, watching my portfolio slide 10% during the first six months of 2016 was not a happy experience. Still, a recovery eventually emerged and at least I can enjoy a positive — if hardly spectacular — full-year performance.
On reflection, I should have been somewhat bolder with my 2016 share-buying. I certainly should have put a lot more into my new purchases and bought more than I did during the immediate Brexit aftermath.
As a full-time investor with no other income, I’m finding it a tough balancing act between being bold and being reckless with my buying. I doubt 2017 will be any easier!
This is how my portfolio has changed since the start of the year
The table below shows how my portfolio stood at the start of the year, as well as at the end of March, June, September and December:
01 Jan 2016 (%)
31 Mar 2016 (%)
30 Jun 2016 (%)
30 Sep 2016 (%)
31 Dec 2016 (%)
|City of London Inv||6.8||6.6||6.9||7.8||6.5|
|Electronic Data Proc||2.8||3.0||3.3||3.0||2.8|
|World Careers Network||2.0||4.0||3.6||3.8||4.4|
Company updates from the last three months
As usual I have kept tabs on all of my existing holdings during the quarter — trying to seek out bargain buys just in case.
Here is a summary of Q4 developments:
* Nothing from Andrews Sykes, City of London Investment and FW Thorpe.
I’ve written a full review of all the shares I held during 2016 — simply click here for the complete run-down.
So that brings me on to my 2016 performance
I always like to study my portfolio’s performance at the start of every year.
It’s just that I’m keen to discover where all my gains (and losses!) occurred during the previous twelve months, and to see whether my portfolio decisions were consistently good, bad or indifferent.
Here are my performance ground-rules:
* My year-end portfolio weightings and returns are calculated using bid prices;
* All dealing costs, withholding taxes, broker-management charges and paid dividends are included;
* My benchmark is the FTSE 100 Total Return Index (that is, the FTSE 100 index with dividends reinvested, as published by FTSE.com)
Now here’s a summary of my portfolio’s performance for 2012, 2013, 2014, 2015 and 2016:
|Year||My Portfolio||FTSE 100 TRI|
I have to say that I was a tad underwhelmed when I worked out my performance for 2016. I have not lagged the market for a few years now and I do hope my performance can improve for 2017 and beyond.
I’ve looked at where my 2016 gains and losses came from, just to check where I went right and wrong.
Here’s the table containing all the stats
Below is another table listing every share I owned during 2016. Alongside each holding is my portfolio’s weighting at the start and end of 2016.
This table also shows the total return (that is, the capital gain/loss plus dividends received) each holding produced for me during the year. Each holding’s contribution towards my overall 7.6% gain is disclosed, too:
01 Jan 2016 (%)
31 Dec 2016 (%)
|City of London Inv||6.8||6.5||10.2||0.7|
|Electronic Data Proc||2.8||2.8||15.9||0.4|
|World Careers Network||2.0||4.4||17.1||0.7|
I hope the above table makes sense.
Just to confirm, during 2016:
* I bought two new holdings (BrainJuicer and Bioventix);
* I sold one holding entirely (French Connection);
* I trimmed three holdings (FW Thorpe, Tasty and Tristel);
* I topped up three holdings (Daejan, M Winkworth and World Careers Network), and;
* I left eight holdings untouched (Andrews Sykes, Castings, City of London Investment, Electronic Data Processing, Getech, Mincon, Mountview Estates and Record).
Here are a few thoughts on my 2016 stats
* 12 of the 17 shares I held during the year recorded positive returns (at least for me) — and all of those 12 produced double-digit returns. Sadly only one share gave me a substantial (50%-plus) gain. Still, I am satisfied with the overall consistency.
* Each of my three largest holdings at the start of 2016 — Mountview Estates, Tristel and Tasty — ended the year in the red (at least for me). Out-running the market can be tough when your top positions produce negative performances.
* My three biggest winners of 2016 — BrainJuicer, Andrews Sykes and Record — were relatively small holdings at the start of the year. Out-running the market can also be tough when your best performers are among your smallest bets.
* My top-slicing of FW Thorpe, Tasty and Tristel has meant I am currently running a less concentrated portfolio. During 2016, the proportion invested in my top five holdings decreased from 60% to 41%.
* My portfolio enjoyed a year that was free of obvious howlers. In fact, during 2016 I did not suffer any massive profit warnings — nor did I need to panic sell an entire holding at a thumping loss. I just wish that could be the case every year!
* 15 of my 17 holdings generated total portfolio returns within 2% either way of zero. Not exactly thrilling I know, but this army of smaller performances all added up to +8.1% to beat my overall portfolio return.
Here are some other stats you may find interesting
* Portfolio turnover: I can never remember how to calculate this ratio properly. But for what it is worth, during 2016 I i) sold shares equivalent to 19%, and; ii) bought shares equivalent to 21% of my portfolio’s year-start value.
* Dividends collected: Company payouts represented a useful 3.52% of my portfolio’s year-start value. That income included no less than five special dividends.
* Trading costs: Dealing commissions, stamp duty and account-management fees represented an aggregate 0.15% of my portfolio’s year-start value.
I am 91% invested in shares going into 2017
So here we go into 2017, with my current investments confirmed below:
31 Dec 2016 (%)
|City of London Inv||6.5|
|Electronic Data Proc||2.8|
|World Careers Network||4.4|
As usual, I have no idea what the market will do in the next twelve months. All I can say is that the FTSE 100 index and FTSE 100 Total Return index start 2017 at 7,143 and 5,824 respectively.
So… can I return to beating the market this year?
I’ll be content if the majority of my shares once again put in positive performances — and I can avoid any major mistakes. Well, I have my fingers crossed!
Until next time, I wish you happy and profitable investing!
Disclosure: Maynard owns shares in Andrews Sykes, BrainJuicer, Bioventix, Castings, City of London Investment, Daejan, Electronic Data Processing, Getech, Mincon, Mountview Estates, Record, Tasty, FW Thorpe, Tristel, M Winkworth and World Careers Network.