March 2016 Portfolio Updates

And we're back.  Sorry, I got lazy and figured my posts were TLDR (too long, didn't read).  Thanks to Victor for getting me to update this blog again.

Quick August 2015 recap

Here's a performance recap of where the May 2015 and May 2014 portfolios stood last year August 2015.  May2015 portfolio was up 1.6% after 3 months.   May2014 portfolio was at 9.87%.

At that time, the best and worst performers respectively for the M2015 portfolio were ATD.B (up 15%) and NA (down 12%).  GIL was up 42% and EQB was down about 10% in the M2014 portfolio.

The TSX

From August 2015 through to October 2015, the TSX was down, then up.  Then in November, things really started to tank.  The lowest point was in mid-January 2016 where the TSX lost nearly 14% from August 2015 levels.   Oil prices were and still are completely depressed.  Canadian dollar down due to commodities weakness.

All the bad news was summarized in this Globe and Mail review:

http://www.theglobeandmail.com/globe-investor/inside-the-market/market-updates/the-close-tsx-ends-tumultuous-year-by-dropping-1/article27975542/

In Feb 2016, the markets started to move up again.  Year to date returns for the overall TSX is at about 3% as at the end of March 2016.  So how did the portfolios hold up?  Let's see.

May2015 (M2015) portfolio

So it appears that the M2015 portfolio was quite stable throughout 2015, but it wasn't immune to the economic woes that hit the TSX.  Portfolio performance went into negative territory in both January and February of this year.  However, we see some resilience in our stock picks as the portfolio is now at it's highest point with just under a 9% return since inception.  So, for 10 months, we are seeing just under a 1% return per month.
Hopefully this performance will continue when the portfolio reaches it's one year anniversary.

The chart above compares the performance of the M2015 portfolio vs. the TSX in the same timeframe.  This is where you realize the portfolio is actually doing well with a difference of 20%.
Whereas the TSX is still under water since May 2015.

So here's a look at the individual stock performance within the M2015 portfolio.  Please note that  I took this snapshot on April 7th, so it doesn't show the holding values and performance as of March 2016.  Best four stocks are ATD.B (up16%), EMA (up15%) and WPK (up 23%) SJ (up 6%).  Worst stock is consistent laggard NA (down 12%).  Telus (down 1%) and DH (down 6%) are just meh.

Dividends returned are $389 which gives us a portfolio dividend yield of 2.35% (389 / 16565).

May2014 (M2014) Portfolio

Looking back at the chart for May 2014, it was quite a ride for 2015 wasn't it?  Remember when our one year performance was 25%?  Wow.  Now we are back down to earth.  The portfolio pretty much gave up all of it's gains in January 2016.  As of March 31 though it is now giving us a 12% return since inception.  In May of this year, we will determine what our yearly average return has been over the past 2 years. I'm guessing now we will see about one half of one percent per month return.

The portfolio vs TSX comparison graph shows us that we doing about 20% better than the returns from the TSX.  Basically if you had just put your money two years ago in a mutual fund or index that tracks the market, you'd be losing money right now, plain and simple.

Winners:  GIB.A (up 72%), GIL (up 38%), GC (up 19%).
Losers:  EQB again (down 17%), WFT (down 7%), LNR (down 5%), STN (flat).
Dividends accrued are $501 giving us a portfolio dividend yield of 1.28%.

Ok, so that's it for now.  Next post update will be in May 2016.

August 2015 Performance: 2015 Portfolio 1%, 2014 Portfolio 9%

Continued bad news in the markets has caused a significant downturn for both portfolios this month. Economic slowdown in China was the biggest hit to global markets, specifically their surprise yuan devaluation.  While news about Greece's economy has died down, the financial debt problems still continue to be a concern.  At the same time, it was announced that Canada had slipped into a technical recession (two consecutive quarters of negative growth) during the first half of the year.

Here's the portfolio holdings that we created in May of this year.  Last month, it was up over 6% but at the end of August, the May2015 portfolio was only up 1%. It has shed nearly 5% which is reflective of the overall Toronto stock market.  National Bank (NA), the lone financial stock has taken the biggest hit, now down 12%.  Stella Jones (SJ) down 1%, and Telus (T) just breaking even.  The remainder of the stocks appear to be faring ok for now.

Here's the comparison chart of the May2015 holdings versus the broader TSX, since portfolio inception.  The TSX is down almost 8% mostly due to energy and resource holdings weakness.

The May2015 performance chart shows a wild roller coaster during the month of August.

July 2015 performance

Sorry for not posting at the end of  June 2015, but we are back now.  Let's recap what's affected the Toronto stock market this past month.  All bad news, sorry.

Low oil and commodity prices
Canada's economy on the verge of a recession
Greek debt crisis
China stock market sell-off

Above is the one month graph of the TSX.  The overall market continues to decline. Booo.

Here's the sector map of the Toronto markets for the past 30 days.  There are 8 sectors with similar stocks grouped together.  Clockwise - [top left corner - Materials] , [top centre -Energy], [top-right corner -Consumer Discretionary], [right centre - Industrial], bottom right corner - Healthcare, Telecoms and Utilities], [bottom centre - Consumer staples), [bottom left corner - Financials], [centre - Technology].  Find this map here. Each square represents a company. The colour of the square indicates if the stock price is negative or positive.

It's pretty apparent from the map above, that materials and energy continue to drag the TSX down. Financials have been neutral last month, but the remainder of the market sectors are positive.

Here's a look at performance of the new portfolio I started two months ago back in May2015.  It's up over 6%, so averaging 3% per month.  Pretty good considering that the May2014 portfolio was only up 1.5% per month this time last year.

We find that overall the majority of the stocks are doing well with the exception of National Bank (NA) and Stella Jones (SJ).  The two winners of this portfolio at the moment are ATD.B and WPK, both with double digit gains.

This is how the portfolio looks graphically.  It was flat for the month of June, with momentum building a couple of weeks ago.

When comparing the May2015 portfolio versus the overall TSX, here's what the graph looks like for the past month.  The portfolio is outperforming the markets by 10%.

If we look at last year's stock selections, they aren't performing as well as this years.  The May2014 portfolio is presently down about 6% from May2015.  All the stocks are still doing well but EQB is still the laggard. If this was a real portfolio I'd consider removing it from the portfolio.  Of special note, GIL dropped nearly 8% yesterday, but I think this represents a buying opportunity.

Overall the May2014 portfolio is still outperforming the TSX though.  Above is the 16 month comparison chart.  The TSX has been flat for the entire time.   If you bought an index fund or ETF that mirrored the TSX, you'd be pretty much in the same boat ...not making any money.

FYI, I've decided to remove the past momentum stock posts from the blog this month so as to focus on the model portfolio performance.

Ok, so that's our look at the portfolios this month.  Hope you enjoyed the read.