I Am Not A Good Investor

In the past year, I’ve made an incredible return on my portfolio. I have to remind myself that I am not that good an investor.

I have to wait until the next bear market to see if I have made better decisions than the average person.

In the past week, I’ve been using a new app to track and analyze my investment performance. One of the things I want to address is my lack of understanding of how well (or poorly) I’ve been doing.

Apparently, across all of my accounts, I’ve returned about 21% in the past year (in Canadian dollars). This compares to ~25% for the S&P 500.

One reason for this is that the S&P has just had a killer year from a capital gains perspective. 25% is just hard to beat. Even Warren Buffett (above) said that he’d be happy to match the S&P in a substantial year.

Another reason is that I spent a lot of time in “cash” equivalents with various money markets and short-term bond funds (like ZMMK and ZST).

And besides cash, even when fully invested, I haven’t been 100% in equities. As you have seen from previous posts, I am only about 50% index funds, about 12% bonds/preferred shares, and into high dividends (covered call funds) for the rest.

Were covered call funds a mistake? They earn me a decent monthly income (that I could easily live off of if needed). But I don’t need to earn dividends right now. I’m paying tax on that. Having to pay tax (non-resident withholding tax) also reduces my return.

I’m also diversified internationally, with some Europe-specific funds and international funds. That’s going to reduce my return as well.

Maybe I should choose a balanced fund portfolio as my benchmark.

And maybe I should reduce reliance on high-dividend funds even though their promised return (13%+) is nice.

Something to think about.