2013 Investment Portfolio Returns – Another Good Year

by Mike Holman

New year and time for a new post!

I like to measure the performance of my investment portfolio every January to see how I’m doing.  This year was a banner year for equities and my portfolio went up 19.9% which is pretty good for  a 75% equity/25% fixed income mix.

It’s been said that investors who are in the accumulation phase should be happy when markets go down, so they can get more for their investment dollar.  While I don’t disagree with that idea – in practice, it might not work out so well.

As someone who works in the financial industry, I know that my job prospects go down exponentially with the markets.  A prolonged bear market might be good for a long term investment strategy, but if the investor doesn’t have a job, then it’s not really going to matter much, because they won’t be able to make any contributions.

Even if you don’t work in the financial industry, the markets are often loosely tied to the general economic health of a country.  Think of the great stock market crash in 1929 and the ensuing depression.  Did those people in bread lines really appreciate the incredible investing opportunity they were missing out on?  ;)

Market returns in 2013

For a more complete set of returns – check out http://www.canadiancapitalist.com/asset-class-returns-for-2013/.

Here are the relevant equity returns for my portfolio:

  • Canada 13%
  • United States (in Canadian dollars) 41.5%
  • Europe/Asia 31.3%
  • Canadian dollar lost 6.5% against the US dollar.  This helps increase any non-Canadian holdings

My allocation

My portfolio allocation is 75% equity and 25% fixed income.  Here are the exact allocations:

Asset class ETF Target (%)
Short term bonds XSB/BSV 20
Real return bonds XRB 5
Canadian equity XIU 11
US equity VTI 32
International equity VEA 32


I’ve been a good little indexer this year, so my actual allocations were pretty close to those numbers.  My overall return in 2013 was 19.9%.

Past returns

Here are my returns over the last eight years:

Year Return(%)
2006 14.7
2007 4.1
2008 -17.0
2009 20.24
2010 7.3
2011 -1.8
2012 13.3
2013 19.9

My annualized rate of return over the seven years is 6.9%. At that rate, $100,000 invested eight years ago would now be worth $170,569.

The rate of inflation over the last six years has been pretty low at just under 2%, so my annual real return is almost 5%, which is pretty reasonable.

I have a relatively low amount of Canadian equities (11%) which helped this year as my non-Canadian equities performed much better. This doesn’t mean anything, as there are other years where the Canadian index is the winner. My investment philosophy is to keep my investment fees low and diversify.

How did your investments do last year?



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