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How Are My 2025 Goals Doing?

Byadmin

At the end of last year, I set some goals for 2025. They were:

  • Beat inflation with my returns
  • Track the S&P 500 return (not lag behind it too far)
  • Lean towards capital preservation and away from pure risk or speculation
  • Increase tax effectiveness

So how can I track my progress towards those goals?

ChatGPT gives me the following things I should have as a dashboard:

  1. Portfolio Return (YTD)
  2. Inflation (YTD) → Compare
  3. S&P 500 Return (YTD) → Compare
  4. Portfolio vs. S&P Max Drawdown
  5. Effective Tax Drag % (taxes paid ÷ portfolio value)
  6. Asset Allocation Snapshot

What is my YTD Return?

6.76% so far in 2025.

What is YTD Inflation?

Inflation in the US is 2.7%. In Canada, it’s 1.7%. The Euro area is 2.0%. My portfolio is beating inflation. ✔️

What is the YTD S&P 500 Return?

7.15% in CAD$. My portfolio is keeping up with the S&P 500. ✔️

Portfolio vs. S&P Max Drawdown

S&P fell as much as 19.27% this year in CAD$. My portfolio shows an 18.96% max drawdown in CAD$.

I should be a bit concerned by this. My portfolio did not protect me at all from a stock market crash. So I am almost matching the S&P 500 return and almost matching the S&P 500 drawdown. I might as well sell everything and invest in the S&P 500.

I guess what I am getting is income. But I don’t need income…

Effective Tax Drag %

So perhaps this isn’t very easy to calculate.

My best guess is that my annual taxes on my portfolio cost me about 0.5% on my returns. So if my yearly returns are 8%, it becomes 7.5% after taxes.

One reason it’s low (0.5%) is that a lot of my returns are unrealized capital gains and currency gains. So out of my 6.75% return so far in 2025, 1.1% is capital gains and 3.9% is currency gains (the US dollar falling, making my returns in Canadian dollars increase).

So my dividend return and realized capital gains (the only amount I pay taxes on) will be around 1.75%. And I pay 0.5% of that to taxes.

Asset Allocation

  • US Index Funds (S&P 500 equivalent) – 32.8%
  • EU Index Funds – 8.5%
  • World Index Funds (Vanguard Total World) – 8.1%
  • High Dividend Funds (Covered Call Funds) – 10.5%
  • Preferred Shares / Bonds – 12.6%
  • Sector Specific (Defense Stocks, India, Middle East, etc) – 27.5%

Conclusions

It’s kind of sad to think that I own 24 ETFs and my performance has basically matched the S&P 500 this year, and my max drawdown has also matched.

I’m trying to be diversified by owning some US index funds, world index funds, preferred shares, defense stocks, high dividend funds, technology, India, Middle East, European bonds… and it all averages out.

I may look to close certain positions that have not been serving their intended purpose. For instance, I’m invested in an Indian ETF as well as a Middle East ETF. Are these investments matching the returns of those in Europe or the USA? No. Is it possible that in 20 years they will do well? Yes. But what are the other risks (i.e., currency risk)?

I have to think more about this I guess.

Off to the gym to ponder some more…

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