2019 Portfolio Review

After slightly outperforming the market in 2018 my brokerage account under performed again in 2019. This time by almost 6%. Since the market as represented by VOO (Vanguard's S&P 500 index fund) was up 31.14% (28.72% capital gain, 2.42% income) my return of 25.28% (22.25% capital gain, 3.03% income) was still pretty good.

The biggest contributor to my under performance was the fact that my portfolio was not fully invested.  I started the year 12.31% in cash and after one stock purchase in October ended the year 12.23% in cash. In a very good year for the market this cash position (which only earned a bit over 2% in interest) was a substantial drag contributing 3.53% to my under performance. My individual stocks also lagged the market returning 26.09% (22.25% capital gain, 3.83% income) and contributing 1.52% to my under performance. As did my ETFs (besides VOO) returning 24.45% (20.55% capital gain, 3.90% income) and contributing .80% to my under performance.  This adds up to 5.85% of under performance in good agreement with the actual 5.86%.

Only two of my individual stocks outperformed by more than 10% (JPM, TGT).  The rest were either within 10% of the market return (ALL, BBL, BLK, ED, INTC, IBM, MET, NSC, UNH) or lagged the market by at least 10% (BNS, CM, CAT, CVS, XOM, PEG, SOUHY, TD, WFC, WBK).  One of my ETFs lagged the market by over 10% (VDE), the others lagged by less than 10% (VNQ, VPU, VYM).

As noted above I made one purchase during the year.  I bought some UNH (a health insurance company) on Columbus day.  This was good timing for once as UNH came out with a good earnings report and the stock performed well for the rest of the year. Hopefully it will do as well as my AET investment.

HP Notebook Breaks

Last summer I received as a gift a HP notebook computer (model 15-db0015dx). This is a low end machine but it was fine for web browsing and checking my email. However after about 6 months of normal use it developed a flaw in the upper left hand corner of the screen (which I am told is due to a crack in a internal glass sheet). Although the machine was theoretically still within the one year warranty period HP refused to fix it. Their position appears to be that any problem that could conceivably be due to customer abuse of the product isn't covered by the warranty. Which of course makes the warranty of little value as I not sure what if anything would be covered.

In my case the problem could easily have been due to a manufacturing defect, the machine could have been assembled slightly out of spec with the glass jammed into a position where it didn't quit fit and was under stress which eventually caused it to crack. Or the design could be inherently defective, unable to withstand normal use. According to internet sources some of the newer lightweight machines are so flimsy that just holding the display part by the top corner instead of the top center to open it can crack the screen. Which in my view is a defective design.

This has left me considerably annoyed with HP and I will be reluctant to buy their products in the future. I will also think twice about extremely lightweight designs. I bought a Dell Inspiron laptop about 10 years ago. While a little clunkier it has held up fine with similar use.