Friday 1 January 2021

End of December "12% solution" portfolio changes

For the end of December the emailed trading signal was still to be invested 60% in IWM (iShares Russell 200 ETF (All Sessions)) and 40% in JNK. This was the same as last month, so I don't need to do any trades again this month, which will help reduce trading costs. It will be interesting to see how this portfolio performs during 2021.

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David Stern said...

So how did it do in 2020? said...

I only started trading my "12% solution" portfolio at the start of August, so don't have full year result for 2020. My portfolio was up by 5.25% at the end of Dec 2020, which is quite good considering the quarterly account keeping fees on my IG account I had not taken into account when deciding to use IG for this $10K portfolio. The months where the "12% solution" allocation did not require any change to existing holdings helped offset the account keeping fee (by not having any trading costs in those months).

My IG account also contains a small tranche (about $500) of ASIA (Betashares Asia Technology Tigers ETF) that I was already holding before starting trading the "12% solution" with $10K, so the annual performance figures won't be purely due to the "12% solution" trading (but it will account for about 95% of the total performance of my IG account.

Given the trading costs on this small account balance, I'll be happy if the average RoR over the next ten years ends up close to 10% (before tax*).

According to the "12% solution" monthly email for end of December, the total return (excluding any trading costs) were:
The 2020 YTD performance: +40.6%
The 2019 performance: +12.4%

Total return since 2008 (to Dec 2020) for the "12% solution" was apparently 453.4%. I'm not sure of the exact date tracking was started, but this is about 13 years, so the average compound RoR is roughly 14% so far.

* due to the monthly trades, there will be some short-term CGT due at my marginal tax rate each year, depending on my other CGT events. So I won't even try to work out an after-tax RoR.