A Review Of The Investment Performance For 2016

Before I get onto reviewing the investment performance for 2016 as a whole, I want to start with the last quarter of 2016. I set out with a strategy to invest in high yielding stocks which I thought were undervalued. As it turns out, that wouldn’t have been a bad investment strategy. Or at least, I wouldn’t have done too bad to date. I bought Lloyds Banking Group for 53p and that’s now trading around the mid 60p mark. Bloomsbury Publishing was bought for £1.55 which is now trading around £1.70. Royal Mail bought for £4.90, is now trading at £4.14 and Persimmon bought for £17.87, now trading around £22.70.

Out of those 4 stocks, I would have had a loser, Royal Mail. Note, I didn’t sell at those prices, i’m merely pointing out what would have happened if I had held onto them. I won’t go into the exact reasons for buying those stocks now as they are in the past. Those 4 stocks have now been sold. That’s because my fly-by-night tactical move of only investing in high yield stocks very quickly passed. Just like all the other investing fads throughout the year!

As of the year end, we are still holding 3 UK stocks. Burford Capital, Kainos Group and iGas. I will talk more about those last 3 holdings in my next Tracking Our Assets and Liabilities review. Besides the 3 remaining stocks held at the end of the year, we held an overseas equity fund. The property fund got dropped due to Brexit concerns and liquidity issues with property funds at the time.

Scroll / slide to see whole spreadsheet

Still Over-trading I See!

In my last review, I mentioned my amazing ability to over-trade. As you can see from the Assets and Liabilities statement above, that trading thing got worse. Therefore, I have decided to reign it in. No more trading our long term investments going forwards, I promise!

I am lucky with regards to the money purchase section of my employers pension scheme. The transaction costs are covered by my employer. Otherwise, I could have lost a lot of money just through the constant switching of funds with transaction costs and fees. That could ultimately have a significant impact on the overall long term investment performance. Unfortunately, I did have to pay the transactions costs for all the stocks bought and sold. However, the net result from all those transactions was not a bad one. Most people will have to pay the transaction costs, so please take my advice here and don’t be so trigger happy.

So How Was My Investment Performance For 2016?

Unfortunately, I only started tracking our investment performance from 15th January 2016. I would have liked to have started on the 1st January 2016.

The value of investments, minus deposits rose by 16.59% over the year. That’s a return that I would happily accept every year. However, I need to know how that compared to…..what? Normally that would depend on what index the components of the portfolio most closely resembled. Throughout the year, our portfolio has been all over the place. I think I was invested in just about every regional fund and asset class at some point. Rarely all at the same time though.

So was all that chopping and changing in investments worth it? Did I manage to beat the market? Rightly or wrongly, I am going to see how I compared to two tracker funds. These tracker funds are available for me to invest in, within my employers pension scheme. The Global Equity Tracker and the UK Equity Tracker funds closely reflect the MCSI World Index and FTSE All Share Indexes respectively. The below graph shows how they have performed over the relevant time period……

FTSE UK All Share Index vs MSCI World Index

FTSE UK All Share Index vs MSCI World Index


As you can see, my 16.59% return seemed fantastic at first. I was sure that it would be comparable to the market. However, I would have been better off, just putting my money into one of the tracker funds above and leaving it there. That said, I am being hard on myself because £30,000 – £40,000 of our funds were held on deposit for most of the year. If I leave out £30,000 cash on deposit, that gives me a return on equity investment of nearer 28%. That’s more in line with the performance from the Global Equity Tracker Fund.

Now that I have an audience to keep me in check, I expect better things for 2017. I have also established some new rules which I am sure you will make sure I adhere to:

  • Buy on corrections and pullbacks
  • Don’t over-trade
  • Keep investments simple (Don’t over complicate them)

Anyway, that’s it for 2016. I hope you follow my journey throughout 2017.

TW Fund Factsheets

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