2022 Portfolio Review

Last year was a bad year for stocks.  The market as represented by VOO, Vanguard's S&P 500 index fund ETF, was off 18.17% (consisting of a capital loss of 19.53% partially offset by dividends of 1.36%).  My main brokerage account did quite a bit better being off only 10.79% which is outperformance of 7.38% .

During the year I made a number of moves.  Early in the year I sold my WBK ADR's.  WBK is an Australian bank that had not done well and when it was announced the ADR program would be terminated selling seemed the simplest thing to do.  Near the end of the year I belatedly sold my INTC as after many years of missteps I finally got fed up enough to sell.  At the same time I bought VGT, Vanguard's technology ETF, to keep exposure to the sector.  VGT has close to 40% of its funds in just two stocks, AAPL and MSFT.  I would prefer less concentration but bought it anyway.  I also bought RY and BMO the two of the five big Canadian banks that I didn't already own.  And I bought VIG and SCHD two ETFs that try to buy stocks with growing dividends.  Both have low expense ratios and good records.  However VIG invests more in stocks with low current yields than SCHD.  Currently VIG is yielding 2.00%, SCHD 3.63% (compare to VOO at 1.65%).

The following performance figures aren't super precise.  I calculated yearly returns for the buys, sells and dividends received as if the money was kept in cash without interest for the remainder of the year.  All interest on my cash position was attributed to the remaining cash somewhat overstating the actual yield.  As usual I added Canadian tax withheld back in as this is intended to be a before tax accounting.

At the beginning of  2022 I was 50.48% invested in VOO which of course matched the market (as measured by VOO).  I was 29.78% invested in individual stocks which with a return of -4.03% (-6.88% capital, 2.84% income) outperformed the market by 14.14% or 4.21% overall.  I was 13.26% invested in ETFs (besides VOO) which with a return of -4.38% ( -6.99% capital, 2.61% income) outperformed the market by 13.79% or 1.83% overall.  And my cash position of 6.48% (which excludes the cash used for buys made during the year) returned 2.46% for outperformance of 20.63% or 1.33% overall.

4.21%, 1.83% and 1.33% adds up to 7.37% of outperformance in good agreement with the 7.38% cited above.  My performance relative to the market had previously been pretty bad, these results make the overall comparison more respectable although I am still trailing.  However it is possible this performance in a bad market year shows that my portfolio is safer than the market something I am willing to sacrifice a little in expected total return for.  However in a generally rising market my inability to stay fully invested has been a drag on results.  And there is little justification for it as I have substantial cash reserves outside this account.