Model Portfolio End of 2014 - 12.7%

Happy New Year to One and All!   Hope you had a healthy and happy 2014.  Just thought I'd check in our model portfolio and take one more peek at it to see how it fared for the past seven and a half months.

Recall that we built this model portfolio back in May 2014 with a hypothetical amount of about $35,000.  We took that amount and bought seven stocks with it, with diversification in different industries.   There was a deliberate avoidance of those sectors that make up the majority of the TSX, namely:  Oil, and Materials.  We did have some exposure to the financial sector via the stock Equitable Group. 

As of January 1st, 2015, the portfolio has increased in value by 12.75% just shy of 8 months.  This works out to an increase of approximately 1.7% per month.

It weathered two significant drops, one occurring in mid October and the most recent sell-off in oil and banking in mid December.  Despite the stomach churning falls, the model portfolio rebounded even stronger as can be seen in the performance graph above.

In the comparison graph of model portfolio vs. TSX, the TSX never fully recovered after the first sell-off and the subsequent exposure to banking and oil sector losses ended up not making any money.   The model portfolio made a handsome $4500 in the same time frame.

The majority of the stocks made double digit gains with the exception of Equitable Group and Stantec.   I think the stocks that we picked benefited from the US recovery, such as Linamar, CGI and West Fraser Timber, but they were not without their scary moments.  Linamar lost a lot of it's value not long after we started the model portfolio, and then CGI got a lot of bad publicity due the the Obamacare wesbite which they worked on.  Great Canadian Gaming took off but it's gains can be attributed to it's competitor Amaya Gaming through it's purchase of Poker Stars.Net.

It will be interesting to see how this portfolio does going into 2015.  I suspect it may not repeat it's performance, as investor money will flow back into the Oil and Banking sectors.  Historically stocks seem to sell-off in January, so I am anticipating a drop in portfolio value when we return to our regular review period during the middle of the month, two weeks from now.

Down forget to read the interesting articles I've listed in the Musings section.

If you are one of my friends and have a basket of stocks you want me to monitor, let me know and I'll create a new portfolio.

Thanks for looking and see you mid January.