2017 DIY Investment Portfolio Recap

Last year, I recapped the five previous years of returns and my investment ground rules for the taxable portfolio I discuss on this website.  Today I am sharing my 2017 DIY investment portfolio recap.  This will detail:

  • 2017 investment results
  • Six Year Portfolio Growth
  • Top 2 Investments for 2017
  • Worst 2 investment for 2017

Why DIY Investing?

I previously mentioned this, but to repeat – I invest in index funds primarily in our retirement accounts (in addition to fixed income.) In our taxable accounts, I invest in individual securities with as little turnover as possible to minimize the tax implication. I think for most investors they will do better with index funds. However, three primary reasons why I invest in common stocks are:

  • Investing is my hobby. I measure my performance against benchmarks and attempt to outperform the usual investing benchmarks.
  • Active Investing allows me to personally select what I feel will provide the best risk adjusted returns.
  • Active Investing helps me achieve my goals for my taxable portfolio. Overtime this portfolio will be used as income to pay for our monthly expenses. A far greater yield can be generated from your investments than what he S&P is currently providing at 1.91%, with potentially less volatility than the S&P 500 index.

SERIP Portfolio Allocation

This view generated from my Personal Capital dashboard displays only the accounts I selected for our early retirement portfolio.  This shows the allocation between the US stocks and International.  I currently hold no bonds and very little in alternates in the form of a REIT in this portfolio.

DIY Investment Portfolio Recap

After drilling down into the US sector breakdown, you may notice that I am over allocated to consumer cyclical.  We made some investments in retail companies that were particularly beaten down over the past 2 years.   These investments started to take off towards the end of the year which has inflated the overall allocation to this sector.

2017 DIY Investment Portfolio Recap

2017 Investment Return

At the start of this year, I thought 2017 was going to be a flat year from an US market perspective.  I remember thinking about selling some holdings with the intent to redeploy into an investment property.  I am glad that opportunity never came to fruition as the S&P returned over 20%.

Our early retirement investment plan (SERIP) returned 29.34% for 2017.  This handily beat the S&P500 which returned 20.49% with dividends reinvested.  The SERIP returned nearly a full 9% more than the index.  This makes 2017 the second best year in my documented history for beating the S&P500 over the last six years of tracking.

I used the annual return figures for the S&P 500 from YCharts.

Six Year Growth of $100

Year

My Portfolio

S&P 500

2012 19.07% 16.00%
2013 31.42% 32.39%
2014 9.23% 13.69%
2015 -1.48% 1.38%
2016 33.33% 11.96%
2017 29.34% 20.49%

After 4 years of tracking very closely to the index, our portfolio started to take off relative to the index.  I am not here to tell you that I figured out how to beat the market consistently.  I haven’t.  I uncovered a few opportunities and made larger investments as a percentage of the portfolio than previous years.  No investment was made for more than 10% of the portfolio.  Each one of these investments has done rather nicely.

Top 2 Investments for 2017

  • Fiat Chrysler – I discussed my investment with Fiat Chrysler previously.  This company is now my largest holding and it returned a whopping 97% for 2017.  I continue to watch and hold this company.  It is definitely not the overwhelming value buy that it was over a year ago, but they still project significant earnings growth next year.  I may trim this position for 2018.
  • Brown Forman – This company returned 52% not including dividends received for 2017.  I thought the company was overvalued at the start of the year and I still believe it is overvalued.   I will likely continue to hold this excellent blue chip.  This company usually holds up nicely in recessions, however the valuation is starting to get uncomfortable for me.

Top 2 Worst Investments for 2017

  • IBM – I have been holding IBM stock for years.   IBM had a capital loss of 7.91% for the year, partially offset by the dividend yield.  I continue to hold this company, collecting the dividend and waiting for management to find ways to grow the business again.  I have held this company for over a decade now.
  • Exxon Mobil – Exxon had a capital loss of 7.43% for the year, partially offset by the dividend yield.  I sold part of my position in this company as part of my tax-loss harvesting strategy to offset capital gains for 2017.  We still believe the long-term outlook is rather good for this company.

Looking back at 2017 and to the future.

It was an unexpected return for 2017.  I feel quite happy that all of our accounts are at record highs.  In the back of my mind, I am still awaiting a correction.  I know it is coming.  If only we knew the exact moment.  I am not making any predictions, but I can’t fathom 2018 will be as good a year as 2017, but you never know what is in store.

Happy New Year!

 

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