Fiscal Update – Sept 2015 – Correction Continues

Stocks Continue to Fall

Stock markets in September continued to head lower. The Dow Jones dropped 2% during the month. The S&P500 fell 3%. And up here, the TSX Composite fell 5%. This isn’t inherently good or bad. It’s good for beginner investors who are thinking about buying their first index fund. But it can be bad for retirees who are counting on their nest eggs to outlast their lives. I’m somewhere in between that spectrum. I already have some skin in the game, but most of my investing years are still ahead of me. 🙂

*Side Income:

  • Part-Time Work = $300
  • Dividends = $500
*Discretionary Spending:
  • Fun = $200
  • Debt Interest = $1400

*Net Worth: (MoM)15-08-networth-chart

  • Assets: = $893,300 total (-5400)
  • Cash = $2,000 (-1000)
  • Stocks CDN =$85,800 (-3000)
  • Stocks US = $63,400 (-2100)
  • RRSP = $56,500 (+100)
  • MICs = $15,600 (+600)
  • Home = $259,000
  • Farms = $411,000
  • Debts: = $502,100 total (-2600)
  • Mortgage = $192,200 (-400)
  • Farm Loans = $199,300 (-500)
  • Margin Loan CDN = $27,900 (-1000)
  • Margin Loan US = $27,600 (+400)
  • TD Line of Credit = $24,500  (-500)
  • CIBC Line of Credit = $10,000
  • HELOC = $18,200
  • RRSP Loans = $2,400 (-600)

*Total Net Worth = $391,200 (-$2,800 / -0.7%)
All numbers above are in $CDN. Conversion rate used: 1.00 CAD = 0.75 USD

I wouldn’t read too much into the recent market performance because September has historically been the worst performing month on average. And since the country has been in a technical recession for the first half of the year it’s not surprising investors have a more bearish outlook for stocks lately, even though the economy and stocks are not really correlated in the short term.

Last week I posted my overall portfolio performance, but as some readers mentioned, the mixture of Canadian and U.S. stocks and currencies doesn’t really tell a meaningful chart. So today I’ll just post my Canadian TFSA account, which only holds Canadian securities. Here’s the entire history of my account since its inception.

15-10-tfsa-performance-cad

So over the past 5 years roughly I was able to achieve 9.5% return annually. The best part is I can cash out everything today tax-free. 🙂 But from 2011 to now isn’t a very long time. As the observant reader, HarperFanClub recently mentioned, we have not had enough time for a complete market cycle to take place to accurately determine my long term performance in investing. If my TFSA portfolio can continue to outperform the Canadian stock index (S&P/TSX) for the next 30 years then I will admit to being pretty good at picking stocks. But for now, with such a short track record, I think most of my gains so far is due to luck. But comparing returns to the market index isn’t always useful. As the scholarly commentator, Anon mentioned in a previous post, we should be comparing our stock performance to a personalized benchmark that will meet our financial goals, and not focus too much on index comparison. The index is just average, but our investment goals are not. Lastly, below is everything that I have in this account at the time of this posting. 🙂

15-10-holdings-in-cad-tfsa

These are not stock recommendations. I’m just sharing what I like to invest in. 🙂 Some of these names like Allied Properties have been in my account for several years. I like its consistent income and the strong real estate industry it operates in. Other stocks like Royal Bank I’ve only recently picked up due to its attractive valuation thanks to the recent dip in the markets.

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Anon
Anon
10/04/2015 6:16 am

I’m THAT Anon.

Anyway…another reason to compare your portfolio performance to your financial goal is to possibly reveal how much risk you are carrying.

Do you need to be making 9.5% a year? Maybe your goal only calls for 6%, which means your portfolio is overweight risk by a lot. You can then allocate and rebalance appropriately.

Or if your goal is to have a dividend income of 20% yield on cost in 30 years, then an index comparison is even more absurd.

Or if your goal is to simply build up a cache of diversified assets, the TSX won’t tell you a thing about your personal performance.

That’s why having an implicit and detailed goal is much more important than tracking aribtrary indicies.

But another job well done! Do you do an All Account/Asset Total Return report?

Investing Pursuits
10/04/2015 12:22 pm

Liquid,

A 9.49 percent annualized return in the TFSA is quite impressive, give how much the markets have declined over the past number of months.

Tawcan
10/04/2015 3:05 pm

Pretty impressive returns you’re seeing across the board. Considering the markets have been down the last few months, you’re doing really well. Keep it up.

Pira
Pira
10/06/2015 7:11 pm

Love seeing what you have in your portfolio. The husband has gotten burned by BBD and I see you have a bit too, shucks. I wish I bought Dollarama ages ago, though it doesn’t seem to be slowing down based on the numbers and also based on the number of people in the store at any given time!

Fig @ Figuring Money Out
10/08/2015 6:18 am

I’m finding these updates and the comments fascinating! Investing and portfolio management is one area where I need to grow so seeing what you have in your portfolio is really interesting!