Past performance is no guarantee of future results, but here are some stats:
April 2010 +6.06%
April 2011 +4.4%
April 2012 -6.13%
April 2013 +2.9%
April 2014 -2.51%
Now that that’s out of the way, today was cruel. Down 2 months take-home pay. I have had 5 days in a row of losses, a total of 5.25% down, For the month there where 6 days when the loss for that day was greater than 1 month’s take-home pay and 4 days when the gains for that day were greater than 1 month’s take-home pay. That’s 10 days in 20 market days in April. Is that normal? Last month I had 7 days of gains and 8 days of losses.
For the year, I’m up 27.47% and year-to-date I’m down 1.42%
Annualized returns of the past 83 months are 15.63%
I am off 8.87% of the highs of March 6. First month since June 2013 when my portfolio has not made new highs.
Assuming the market crashes 42.2% (as it did for me between the 8th December 2010 and 4th October 2011) from my March 6 highs, my annualized returns would drop to 3.82% and if I apply that to my decimated (by 42%) portfolio, the returns would be sufficient to live (frugally) off of. I have added a 3% inflation every year. So a 100 today would be 200 in 2036, 236 in 2043 and so on.. My dividends are 1.59 times as much currently and since I am not leveraged, I cannot be forced to liquidate my holdings.
Now with the current rate of return (15.63%) I would have 5½ times as much!
I am not into charts and I like to think I am a mature investor who remains unimpressed even when the chart-speak is in my favor. However, my portfolio’s 100 dma has been breached for the 1st time in a year since I have been following the dma.
“Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.” W. Buffett
And now for the good news. I sent a whopping 83% of my quarterly income into my portfolio. If that hits my account today, it would bumping up my portfolio by 2.59% but I have had 5 of these greater than 2.59% (up or down) move days, over the last quarter.
I will be shopping next week. Last time I did this was in February when I followed my rules (for buying) and it was hard*, and I’m up 1.53% on those buys as a whole. The ones that I almost let me emotions take over and not buy, but did buy (following my rules) are down 19.42%. I am sticking to my rules! And the ones I was eager to buy and bought because I stuck to my rules are down 9.53%. Had I bought my eagerness and not my rules, I would have been down 9.53% instead of the up 1.53% as a whole.
“You should always become more skeptical of any investment that has recently soared in price and you should always become more enthusiastic about any asset that has recently fallen in price.
That’s what it means to be an investor.” Jason Zweig
* It will always be a struggle to get through your investing life and stay true to what you know is the right decision.