As most of you already know I share all the stock holdings in my U.S. margin account under the “Portfolio” menu above. But let’s take a closer look at my holdings today.
- At the end of July I was holding 16 different stocks in my U.S. margin account.
- I gradually deposited a total of $14,000 USD into this account over the last 3 years and bought a total of $35,600 of stocks (“book value.”) This means both my risk as well as potential for reward are increased by 2.5 times (2.5 leverage)
- Last year the S&P 500 index gained 30%, and my U.S. margin account gained about 75%. Hurray for leverage!
- The shares in this account today are worth almost $50,000. The “Cash Balance” amount of -$22,301.64 you see below already has the 4.5% annual margin cost built in since interest is charged to the account every month which adds to the size of the negative cash balance. However I also receive dividend income from many stocks inside this account. So overall the net margin interest over the last three years eroded away about $700 of my portfolio value which means my actual EQUITY in the account today is worth $27,518. Booyah! That’s almost 100% return on my initial $14,000 investment
My Google class-A shares is showing a 14.95% loss but that’s a little misleading because I’m actually up 69% on Google so far :) The tech giant did a stock split earlier this year. The market value was split between the old and new class of shares, but my book value remains attached to my original purchase.
And below are some details about my Canadian margin account for those who might be interested.