Hello friends. It’s a new year. 😀 My investment strategy for 2017 was simple; to buy dividend growth stocks and alternative investments. Dividend stocks and alternative assets tend to grow in bull markets but also hold up well in recessions. The plan is to earn respectable returns while reducing risk to the downside. Here are my 2017 results.
Average return on investable assets = 18.9%
Overall I am quite thrilled with this outcome. 🙂 The broad Canadian stock market index (S&P/TSX Composite) returned about 9% in 2017. I remain convinced that a dividend based investment strategy works better than index funds.
Another variable that worked to my advantage is geographical diversification. Most equity markets in foreign countries performed extremely well. For example, the S&P 500 index in the U.S. gained 20%. Holding U.S. and European stocks helped me a lot this year.
The Best of 2017
Liquid’s Top 10 Best performing stocks of the year:
- Canopy Growth Corp (WEED) +213%
- Match Group Inc (MTCH) +82%
- Caterpillar (CAT) +64%
- Avigilon Corp (AVO) +63%
- Dollarama (DOL) +59%
- Amazon.com (AMZN) +58%
- Premium Brands Holdings (PBH) +55%
- Deere and Co (DE) +55%
- Blackberry (BB) +54%
- Netflix (NFLX) +53%
The Worst of 2017
Liquid’s Top 10 Worst performing stocks of the year:
- Crescent Point Energy (CPG) -45%
- High Liner Foods (HLF) -23%
- Cineplex (CGX) -22%
- Cameco Corp (CCO) -14%
- Viacom (VIAB) -10%
- Halliburton (HAL) -8%
- Keyera Corp (KEY) -7%
- Boardwalk REIT (BEI.UN) -7%
- Target Corp (TGT) -6%
- Goldcorp (G) -5%
We can’t win them all. But as long as we get it right most of the time then everything will work out eventually. 🙂
2017 Investment Breakdown
All returns mentioned below are internal rate of returns (IRR) unless otherwise stated.
Annual return = 16.3%
Net Asset Value = $190K
This includes my entire RRSP portfolio, most of my TFSA and a small cash account all held within TD Direct Investing. The combined return over the last 12 months was 16.28%.
I hold about 15 individual securities in my TD TFSA, and another 30 in my RRSP account. If you are interested to see exactly what they are I’ve listed all the stocks on my portfolio page. 😀
Note: Past performance doesn’t guarantee future results and readers should not take any stocks I buy as recommendations.
Interactive Brokers – Non Registered Portfolio
Annual return = 25.3%
Net Asset Value = $158K
This is where I have my margin account. I hold Canadian, U.S. and U.K. securities in here – mostly preferred stocks and dividend stocks due to the preferential tax treatment of their returns. One reason the return is so high in this portfolio is because I am using leverage (borrowing money to invest.)
Antrim Balanced Mortgage Fund
Annual return = 6.2%
Net Asset Value = $20K
This is a mortgage fund that’s held inside a TFSA. It’s a fixed income investment that offers steady and predictable interest payments every quarter. This is my largest mortgage investment corp (MIC) but I also hold smaller positions in publicly traded MICs in my TD portfolio.
Related Post: What are Mortgage Investment Corps?
If the stock market tumbles in 2018, private MICs such as Antrim should not be negatively affected. Below is a chart of the fund’s performance over the last 15 years. Despite a 38% drop in the stock market during the 2008 financial crisis, this mortgage fund continued to earn positive returns for investors throughout the recession.
MICs tend to underperform stocks in a bull market. But their purpose is to provide stability during tumultuous times. This is why I buy and hold them. Overall they represent a small portion of my investment portfolio (about 10%) but they are an invaluable part of my strategy to not get ruined in the next market crash.
Annual return = 11%
Net Asset Value = $22K
As discussed in my post last week this is my newest investment with only one year of return history. I think national GDP growth will slow down next year to 1% which may cause more delinquencies for private borrowers but we shall see what happens. Overall I am happy with the P2P lending platform.
Overall I have about $390K of investable assets which are all outlined in detail above. Additionally I have farmland equity worth $250K, and real estate equity in my condo worth $70K. This gives me a total net worth of about $700K after subtracting consumer debt. One thing I want to get into more is emerging market equities. This can be done by purchasing funds such as the iShares Core MSCI Emerging Markets ETF (XEC) in a discount brokerage account.
The majority of my investments have delivered returns that have either met or exceeded my expectations. I hope everyone had a great year and that 2018 will bring us continued prosperity and freedom. 😀
Random Useless Fact
Average return on investable assets = 18.9%
S&P 500 index in the U.S. gained 20%
So you didn’t beat the market. Are we supposed to be impressed?
All your complex alternative diversification just added more risk and less return.
Plus no mention of your cryptocurrency plays.
US is not the market, and above 18% is not impressive? Like, what are you?
For crytpocurrency, read his previous posting, duh.
The S&P is the most quoted de facto of “The Market”.
It’s the most developed index in the world with ~50% of its return derived ex-USA.
So yeah, it kind of is the market.
Above 18% isn’t impressive if a single low-risk index fund can give you 20%.
You’re such a troll, Liquid is Canadian so in CAD the S&P 500 returned 14% as the USD depreciated 6% over the year.
In what world is the S&P 500 considered a low risk investment? i actually laughed out loud when i read that but i would love to hear your explanation. You said it yourself, “everyone is a genius in a bull market”lol
@Guy You should be on here expounding on your great accomplishments rather than belittling someone who is/has taken the time and made the effort to put their investment ideas forward to help others. If I had known you could beat the market all the time, every time I would follow no one else
Ricardo — I wouldn’t suggest following anyone.
clearly you are a follower of this blog as you responded to each of our comments in here.
@Guy You cannot compare Apple and Oranges. Your world is probably the US but if you look at his holdings, many are Canadian Stocks, so his benchmark is a blend of both the Canadian and US index. It’s not that simple to just go and buy US when you start considering the exchange rate impact.
I also don’t believe in comparing just one year. It’s your overall progress against a benchmark for like 10 years that really tells your portfolio management skills.
You cannot compare Apple and Oranges.
Sure you can — when you use risk as the metric.
You can pick a low-hanging Apple which will provide ample nutrition, or you can climb a ladder to try and pluck a canopy-level orange which might not give you the extra nutrition to justify the extra effort of climbing the ladder (and requiting a ladder in the first place) as well as the possibility of falling.
But what liquid is doing is making fruit salad…and still coming up short.
I doubt he can even quantify his risk.
Remember, everyone is a genius in a bull market.
@Guy. As I’ve mentioned in previous blog posts my crypto portfolio is rather small. I don’t include it in my net worth statements and I don’t think it’s relatable to most readers. But I’d be happy to give anyone an update if they ask.
I wrote about buying Ethereum in Sept. Since then I have picked up some Litecoin and Bitcoin as well. 🙂 I have sold 1/3rd of my position but continue to hold these 3 cryptocurrencies. As of now my returns are about 400% on both ETH and LTC. And about 300% on BTC.
You are Canadian, so the better comparison is TSX composite index. Therefore, you’ve hand fully beat the market by wide-margin. Great achievement!
2016 was better year for Canadian investors than 2017. According to BNN, Canadian market performance is rank 72 out of 93 markets, TSX had a low return compare to US and other markets.
I hope 2018 will be good year for everyone 🙂
You are Canadian, so the better comparison is TSX composite index.
This makes absolutely ZERO sense!! I’m Albanian, should I hitch my returns to ONLY the Albanian stock market?! It collapsed 5 years ago so even a 1% return would be a great achievement! LOL Economies are now GLOBAL – it’s inane to limit financial thinking to sovereign borders.
Thanks FJ. That’s too bad we were only at 72nd place out of 93. I think we can do relatively better in 2018 driven by stronger corporate earnings. 🙂 I just hope the stronger Canadian dollar doesn’t cause too much drag on the economy.
Congrats liquid you did great! I can’t believe WEED is up 200% plus!
My investment portfolio was up 12% but I’m still happy with that!
Yes, I was surprised as that too. The marijuana industry is growing like a WEED. 🙂 I can’t wait to see how much tax revenue and GDP growth it will add to the local economy. We are at the center of it all here in B.C.
Nice work liquid. Here’s to another good year in 2018. Tom
Yay. With the tax cuts in the U.S. and the legalization of recreational marijuana use in Canada, I have a good feeling about this new year. 🙂
Good job my friend. I am glad that I found your blog few months back and has been visiting it constantly. You have thought me that you don’t have to be rich to invest wisely or pay some fund manager to invest for you.
You’re right Sameer. Personal finances is a lot like personal health. All the information is out there. The more knowledge we absorb the better we’ll become at enriching our financial lifestyle. It certainly helps to be born rich or have superior genetics. But we all need to make due with the cards we’re dealt. Learning how to invest properly is just as important as exercising and eating right. We could outsource our investments to fund managers. For many people that would be the better approach. But having the knowledge to manage our own affairs is much more rewarding than paying some “professional” to tell us how we should conduct our own finances.
Well done on the performance. TD shows your last 12 months rate of return and I am curious if it can show the rate of return since inception? How are you doing over a long period?
I like the heatmap for the sector breakdown, what tool did you use to generate it?
I too believe a good dividend growth strategy can beat the index. I currently compare my portfolio performance since inception against 50% TSX and 50% SP500. On average since 2009, I beat it by 2% – 3% depending on the day. It’s too easy to beat the Canadian index with 50% of my portfolio in US stocks so I try to match the US content for the index comparison.
My annualized return since inception is 8.71% across all accounts at TD. The latest data goes back to the beginning of 2011. https://www.freedomthirtyfiveblog.com/kj4tv8dlagreat/wp-content/uploads/2018/01/18-01-td-account-return-since-inception.jpg
The heatmap was made using Interactive Broker’s reporting tool. I logged into my account and ordered a free report called portfolio analysis. It’s a long 120 page report detailing my performance on the IB platform in 2017. A snapshot version of the report also exists.
50/50 split between TSX and S&P500 is a good measure of comparison. Maybe I should adopt that too since I have about half my non-registered stocks in the U.S. market.
Great job Liquid!!
Thank you for sharing and best of luck for 2018.
Cheers Lina. 🙂
Thanks Liquid Independence! I’ll keep following your blog. Because of your blog I added MIC in my portfolio and was surprised with the outcome. I also did my research before investing like you’ve always thought the readers. This year I’m trying WEED stocks with my extra moola. Cheers for more success this year.
Guy how did he add more risk? He diversified his portfolio. In fact when I examine Liquid’s portfolio holdings I’m most impressed by the amount of diversification: real estate holdings, alternative investments, stocks, MICs (bonds) etc.
The only thing I’d add is the equity in the farm/condo… you could easily recapitalize the farm mortgage and draw down some equity and put it back out at a higher rate of return. Likewise, if you’re able to claim a home office (write off against your non-registered investing gains) you could recapitalize the mortgage on the condo and reinvest. Doing this would increase your tax deductible interest payments on both properties while potentially creating more revenue through different income streams.
hahahaha @ the comment troll
seriously though, I’ve seen quite a few people with Canopy Growth Corp in their portfolio. Jealous lol.
It looks like it has the ingredients to continue to grow too which is kinda scary!