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Saturday, November 1, 2014

Investing results - first year as an Investor

Wow, it seems like just yesterday that I started my journey as an Investor, as if my addiction to Options trading and Forex wasn't enough. Well, time goes by really fast and it's been 13 months to be exact. So, I think it is a good time to make a stop and analyze how things went for me as an Investor in its infancy.

Taxable Account (Canadian Dollars)
For investment purposes I started with Questrade as my broker of choice on October 1, 2013. I wanted to have a tax sheltered account there but sadly Questrade doesn't allow registered accounts for Non Canadian citizens. As a patriotic, proud and unfortunate Cuban, I had to suck it up and go with the taxable version (or Individual Margin as they call it) while I waited for the Canadian citizenship.

As with the rest of my activity I have been totally transparent publishing all my purchases and reasons behind them. All my positions are publicly disclosed here. I haven't been reporting my monthly income from the dividends in individual articles as I think it is too boring but you can see them as well on the link I previously shared.

I am pleased to report that I beat the Canadian TSX index:
Oct. 1, 2013 to Oct. 31, 2014

The Lazy Trader: +16.12%
Canadian TSX: +14.56%

Great WestLife and Rogers were the laggards here but the other companies more than compensated. I would say the reason for the outperformance was definitely buying below the 200 DMA most of the time and never at all time highs. Plus the fact that I didn't get too involved in the Energy sector which has been hit recently. I wouldn't say it was pure luck. I avoided the sector as I kept seeing everything way too expensive compared to its own historical norms.

Taxable Account (American Dollars)
Because I'm invested in American large caps, my benchmark for this account is the Dow Jones Industrial Average. Unfortunately I underperformed the Dow:
Oct. 1, 2013 to Oct. 31, 2014
The Lazy Trader: +8.41%
Dow Jones: +14.92%

The dividends reflected on the above table are 15% lower as the non resident withholding tax has already been deducted.

I'm not feeling bad about this relative under-performance as there is significant capital that was added recently while the Dow has had an entire year to grow. For example I recently added to my position in Chevron (just last week) and I also added to my Exxon investment just a month and a half ago. That capital wasn't paying me dividends throughout the entire year, let alone enjoying capital gains. So, late investments in the year plus dividend taxes withheld made me under-perform and that's no surprise. Overall, I'm relatively satisfied with the results. Notable laggard was McDonalds, but it is not a real concern. I think long term it will continue to be a dominant player in the fast food industry. You have to trust them after so many decades.

Combining both, the Canadian account and the American account, I'm up +12.37% after deducting non resident dividend withholding taxes from the American companies. Otherwise the return is around 13%. I'm happy with that number, specially considering the two factors explained earlier.

I'm glad to be invested in all these companies that reward shareholders with periodical, growing dividend payments and happy that I finally got started.

As for my Tax Free Savings Account (TFSA), I just got started less than 3 months ago, so I'll leave that analysis for late 2015.

Check out Investment portfolio with Transactions history, Dividend payments etc

Related Articles:
Invest and retire before you die - The Bank of Nova Scotia (BNS)
Invest and retire before you die - Emera Inc (EMA)
Invest and retire before you die - RioCan Real Estate Investment Trust (REI.UN) 
ETF Rotation Systems to beat the Market

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  1. LT - Those are great numbers. Good job. " Happy that I finally got started" - that is the key to investing. I know I have been guilty of not being aggressive while the market keeps hitting new highs. Maybe I should just do drips and take the emotions out of the equation.

    1. Thanks Jj.
      It was definitely tough to start during the last quarter of 2013 when the market had already made a remarkable run up. I would say, just be selective. Don't go all in. Invest little by little only on those companies you like that happen to be undervalued. There's always a change that one of them is cheap and has over corrected in spite of a market going to the moon. That's the one I target. Then wait really patiently for one of the others to come down to a more attractive valuation.