2009 Investment Returns For My Portfolio

by Mike Holman

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2009 was an interesting year for the markets.  Following a bad 2008 the equity markets took a dive in March that made everyone nervous and some people even gave up on the markets.

However, following the rapid descent was a very quick climb back to respectability.  While the stock markets around the world are still down from their all time highs, the gains since March have been huge.

Here are the 2009 total returns (including dividends) for TSX and S&P in 2009

  • TSX  34.7%
  • S&P 26.5%.

It was also an interesting year for investors outside of Canada because of the exchange rate volatility with the US dollar.

  • On Jan 2, 2009, one Canadian dollar was worth $0.83 US dollars.
  • On Dec 31, 2009, one Cdn$ was worth $0.96 US$.

This increase of almost 16% meant that any returns from a US investment was reduced by almost 16% because of the currency swing.

How did my portfolio do?

We did ok – according to my calculations the total return for 2009 was 20.2%.  Our portfolio is 20% bonds, 80% equities and only a minority of the equities are in Canada.  While the Canadian equities did extremely well, our US equities were reduced by the strong Canadian dollar.  However, that is the point of diversification so I’m fine with that.

One interesting fact is that our 2008 investment return was -17%.  If someone had invested $100,000 at the beginning of 2008, lost 17% and then gained 20.2% in 2009 they would then be only about $40 short of their original $100k investment.  Not bad for a couple of crazy years in the markets.

Here are my portfolio investment returns for the last 4 years

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How did your portfolio do in 2009?

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{ 8 comments… read them below or add one }

1 2 Cents

Nice returns this year, but it occurs to me that you would have been better off if you put your money in a savings account at the beginning of 2008. I know – you’re investing for the long term and over the long run stocks are supposed to have higher returns. Still, it’s makes you think.

2 Four Pillars

2 cents – no, that is probably not true. My $100k 2 year example scenario involved no new contributions. I’m pretty confident that someone who kept contributing over the last 2 years would do a bit better than 0% return.

The other thing is that a 2 year time frame means nothing. In the US right now there are a lot of media reports of the “lost decade” because the US markets are roughly where they were 10 years ago. That’s because the markets were over-inflated 10 years ago.

3 2 Cents

You make some great points and I agree that a 2 year time frame means nothing. But I do think your investing time frame matters in the sense that a person who followed the advice that anytime is a good time to buy and began investing in stocks 10 years ago is probably not happy with the results.

Likewise, someone retiring now who did not lighten up on equities might be retiring with less than they planned after 10 years of going nowhere. Even if the market was over-heated 10 years ago, the numbers are what they are.

Sorry – I didn’t mean to go all David Trahair on you or anything. ;) You obviously know what you’re doing with your investing. I just worry that the general investing public isn’t fully aware of the risks inherent in markets. I hope your portfolio performs well for you again in 2010!

4 Four Pillars

It’s very true that someone who started investing 10 years ago might not be thrilled with their returns. But if they had been contributing regularly, it might not be too bad.

I think this is why it is important to read books like Four Pillars of Investing or others which explain the history of the markets and that way an investor can have some idea of what to expect. I had no problem dealing with the markets over the last 2 years but that was because I already went through the internet dot com bubble (which I didn’t handle so well) plus I’ve read a lot more about the markets.

I welcome your opinions! As for knowing what I’m doing – not so sure about that. :)

5 Potato

I was down a little over 32% in 2008. Up about 40% in 2009. Net worth is up due to increased savings all throughout though.

6 Four Pillars

Potato – 40%! That’s very good. Of course it was balanced by the 2008 numbers which indicate that you probably have a higher allocation to equities than I.

7 Potato

Yes, I started 2009 at 104% equities. Cleared out the leverage around May, so I could have done better if I stayed leveraged (or increased in March!) a little longer. But none too shabby :) Again, lucky timing helped as I was saving as much as I could up until about May when the savings rate dropped (and the car had some repairs)… so I was buying all the way through with whatever I had. The recovery also made me think buying low wasn’t as critical (I was even afraid at that point of another downleg that never really came), so new savings since the late summer have gone back to rebuilding cash/fixed income.

2008 was actually worse than it “should” have been since I started 2008 with ~25-30% cash/GICs and ended at 104% equities; just based on lucky timing/asset allocation I should have beat the market. The active half of my portfolio got whalloped though, especially H&R (which was then a big out-performer in 2009).

8 Cynical Investor

Good return for the last 4 years. I wish my portfolio would be the same or at least zewro return.

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