It Was the Best of Years, It Was the Worst of Years

I have now been documenting my investing decisions and results for 12 months.  It’s time for a little analysis.  So, how did I do?

Overall my investments are down 7.6% in the past 12 months.  On the face of it this is bad.  However, it’s be an awful financial year and the best way to assess my performance against a comparative index.

One comparative index is the TSX (^GSPTSX), which is down 16.6%.  So I beat the TSX by 9%.  But this is not a fair comparison for two reasons: I have not included the dividends from the TSX stocks in my comparison, which are probably around 3%; and the TSX contains only one asset class (stocks), so it is not a reasonable comparison.

Another comparative index is my TI Index, which I established for the purposes of measurement and comparison.  The TI Index is down only 5.4%. It outperformed my portfolio by 2.2% and the TSX by 11.2%!

One more point for comparison is a five star rated mutual fund or ETF, such as the iShares Balanced Income Fund (CBD.TO).  It is down 2.2% for the year but it also paid a 3.2% dividend, for a total return of 1%.  This is better than my portfolio by 8.6% and better than the TSX by 17.6%!

This begs the question, why not just invest in a balanced ETF?  I don’t have a very good answer for this – I suspect that I enjoy active investing.  But is this enjoyment worth losing 8.6% of my portfolio every year?



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