Month Six Performance - 10.2%

So, here we are at the half year mark of tracking the performance of the test portfolio.  This month is very eye opening. Recall last month, the test portfolio suffered a steep loss, giving back exactly all of it's gains it had made in the previous five months.  However, it wasn't due to poor selection of stocks, the portfolio was simply mirroring the downturns also experienced by the Canadian and US markets at the time.

I'm pleased to report that the model portfolio has not only recouped it's losses but has actually increased in value during this past month.  Check out the YTD return of 10.23%.  Remember, that in month four (Sept 2014), I indicated the projected portfolio increase of 1.6% per month.  If we multiply 1.6% times 6 months, we get 9.6%.  So we are actually ahead of that projection this month.

Here's the YTD performance chart. 

So let's break it down.  This month we have the most number of stocks showing double digit returns since we started monitoring.  EQB 10.11%, GC 42.48%, GIB.A 11.07%, GIL 14.65% and WFT 11.37%.   Only two laggards LNR which is now at least breaking even around 1.6% and STN with a respectable 5.89% return.

STN and WFT produced dividends most recently, with total dividends now at $116.78.  Portfolio gain (including dividends) is $3607.

Thought I would display the portfolio fundamentals to see if any changes.  Here's the way the stocks looked back in May.

I can see that the P/E ratios are getting to be a bit more expensive now.

Two months ago I also compared our model portfolio to the XIU ETF which tracks the top 60 stocks in the Toronto Stock exchange.  Here's the YTD graph of the returns from May 15 through to today.

The Toronto stock exchange did not quite rebound back the same way our portfolio did.  It's now showing a meagre 2.65% return.   I guess this is proof that if you pick stocks with good fundamentals, they will survive the huge drops and rebound nicely.

Well, that's it for this month's review.  See you in December.

Month Four Performance - 6.4%

The model portfolio was almost up 8% in the past couple of weeks before shedding almost 2% in the last few days.  Here's a look at how it's doing.

The portfolio is currently showing a gain of  just over 6% with all stocks in the green except Linamar.  It definitely looks like LNR has run out of steam over the past 4 months, now down 3%.  STN  is up another 5% from last month since the announcement of a stock split coming in the next few months.  WFT has also jumped 14% in the past month, going from a loss of 6% to a nice gain of 8% this month.  CGI has gone from flat to 6% this month.  The remaining stocks have given back about 1 to 2% since August.

Another $20 of dividends were received this past month from LNR and EQB with a total portfolio gain of $2252.  If we average out the YTD return of 6.4% over 4 months we get an average of 1.6% per month.

I should point out that only 5 of the 7 stocks in this portfolio pay any kind of dividend, and none more than 1% yield, so it relies a lot more on growth than income.

Here's the portfolio returns and graph for the past 4 months:

Sep: 6.4%, $2252

Aug: 4%, $1419

Jul: 3%, $1027

Jun: 0.5%, $186

The rounded top of the graph looks like the top of a roller coaster.  Looks like markets will be heading downwards in the next weeks or months.   As a side note I sold off LNR in my wife's portfolio last month, seeing as how it hasn't done much in the last 4 months.

Incidentally, I wanted to see how the test portfolio performance compares with the broader TSX, so I charted the graph between the middle of May until now.

What a surprise that the 7 stocks in the model portfolio mirrors the TSX in performance gains of 6%  and also in the shape of the graph!   And here's the same YTD graph for the TSX ETF called XIU.

XIU is an index fund which is a mutual fund that trades like a stock.  This fund is comprised of the TSX 60 largest companies.  See the description from Google Finance for more info.
https://www.google.ca/finance?q=TSE%3AXIU&ei=Ag0YVPC5JpLV8QbsgoGIAg

If you only could buy one stock and wanted to replicate the returns of the overall TSX, this would be it.  It's 4 month return is 6.76% doing just a bit better than the model portfolio.  It even has a 2.25% dividend yield, which I'm guessing is why it's outperforming the model portfolio by a couple of percentage points (6.7% vs 6.4%).  You also would save on the transaction fees, $10 vs. $70.

I will continue to track the model portfolio vs. XIU and the TSX in the coming months to see how we are doing.