My Investment Portfolio Return for 2010

My portfolio was up 8.9% in 2010. It is disappointing given that the S&P500 was up 12.8% (15.1% including dividends).

The reason for the lackluster number: not following my stops. On at least 5 occasions I did not have a hard stop in place and I decided to hold on to the trade after it went against me, for much larger losses. I should really put a hard stop in place every single time.

It is now 2 year in a row that I underperform the S&P500. Time to step up my game!

My Investment Portfolio Return for 2009

My portfolio was up 20.8% in 2009. In comparison, the S&P500 was up 26.5% including dividends (23.5% before dividends).

In the accounts I actively trade, I started the year mostly in cash. I have been tiptoeing back into the market, but not aggressively enough, which explains my lackluster year compared to the S&P500.

I have been diversified across 3 different strategies:
-Buy-and-hold currently represents 30% of my portfolio
-Trend following using ETFs
-Swing trading on stocks which has not been working so well

In 2010 I will reduce the amount of swing trading and increase the share of my portfolio dedicated to trend following.

My Investment Portfolio Return for 2008

My portfolio suffered some major losses in 2008, down -18.8% to be exact.
The biggest losses came in the buy-and-hold accounts (401k, Janus and the 529 plan).
These accounts are long-term investments (15 to 20-year time horizon), so I am not concerned by what the market is doing in the short-term. I was able to max out my 401k contributions which should pay off in the long run.
In the actively traded accounts (Brokerage, Rollover and Roth IRA) I was mostly in cash for most of the year.



For the year 2008 the S&P 500 was down -37% after dividends (-38.49% before dividends).

My 401k Asset Allocation for 2008

As you can see, I am keeping it simple. I have rebalanced my portfolio and picked 4 new funds in the new platform that have performed well in the past 10 years (or since inception).

This asset allocation is 25% international, 25% large cap, 25% mid cap and 25% small cap.

This is a highly aggressive portfolio which will suffer significant drawdowns in a market downtrend, but also should easily outperform the S&P500 in a market uptrend. Since I am dollar-cost averaging into these funds and do not plan on touching any of this money for at least 20 years, a market downtrend only means I am buying more shares for the same amount of money. What matters is that 20 years from now, the market is higher than where it is now.

My Investment Portfolio Return for 2007

The brokerage account, rollover IRA and Roth IRA consist of stocks and ETFs. These accounts are actively traded. The 401k, the Janus account and the 529 plan consist of buy-and-hold mutual funds.

Returns include all dividends, capital gains and interests on cash balances (before taxes). The brokerage and Janus accounts are the only taxable accounts.

In 2007, the S&P500 was up 5.49% including dividends (3.53% before dividends).

The Janus account consists of just 2 mutual funds, the Contrarian and the Overseas. Needless to say I am very pleased with the 24% return.

On the other hand, I am disappointed by the performance of my 401k. My company decided in November to move the 401k to a new platform with a set of different mutual funds. Let’s hope for better results in 2008.