Portfolio Update October 2020

All of the beneficiaries have made their contributions and they have been matched and it is about time to select new stocks for fall 2020. There were some delays because one of the portfolios was moved from the trustee to the beneficiary and then we had to set up agency and connect to other accounts. These sorts of activities generally take a long time with external financial institutions and require a few interactions with support so they demand patience and focus. We are still working through a few tweaks even now.

Performance Oct 2020

Before we select stocks for 2020, we will look back on performance so far. Our low, like most portfolios, occurred in March 2020. Since that point, ignoring new investment, we are up 46%. If you take into account the portions of the portfolio that are in cash or bonds, our portion “in the market” is up even more, at 56%, in about six months (half a year).

Given that the long term expectation of stock market performance is 6-7%, we basically received perhaps 8 or so years of returns in six months, albeit from a reduced base (measuring from the lowest point in the markets).

This performance shows the importance of remaining in the market during risky times – if we had sold off and gone into cash / bonds during the lowest point, we would have missed out on this period of exceptional gains. On the other hand, we have no expectations of the future and equities could have entered an era of low gains and poor performance such as occurred after the dot.com crash near the year 2000 or the 2007-8 financial crisis.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: