Damien’s £50,000 portfolio performance

Since I began investing I have periodically changed my portfolio using the fund suggestions provided by the 80-20 Investor algorithm and associated research. I always disclose the changes at the time they are made.

The best £288 you'll ever spend?

During the two year membership I used the information provided to outperform the market and professional investors while not taking excessive risks. Typically only around 50-60% of the portfolio is invested in equities. In just two years I produced a profit of 18.83% despite the various crises we experienced including a Greek crisis, a Chinese economic slowdown, a commodity crisis, the Brexit vote and Donald Trump's surprise election win. I managed to turn my original £50,000 into £59,365 in just two years.

Coincidentally I made the money back on my initial subscription within weeks of starting my £50,000 investment portfolio. In addition in the aftermath of the Brexit vote I made 5.35% in just 2 days while the FTSE 100 fell by 5.62%! The table below shows how my £50,000 portfolio performed over the two years versus:

• my portfolio's benchmark (calculated by using the average return for each sector in which my portfolio invested)
• the average professionally run multi-asset fund with comparable equity content
• APCIM benchmarks (the equivalent an investment bank would have made a rich person who could afford their services)
• AFI cautious and AFI balanced indices (which show how much the typical financial adviser would have made you)
• Vanguard benchmark – what the equivalent passive Vanguard portfolio achieved using the same equity content

Name	2 yr profit %	Sharpe ratio	Volatility
50k challenge	18.73	0.48	1.28
Passive Vanguard benchmark (passive strategy)	15.73	0.39	1.3
AFI Balanced (IFA's balanced portfolio)	14.35	0.37	1.12
Average managed multi-asset fund (fund manager)	12.25	0.23	1.03
AFI Cautious (IFA's cautious portfolio)	10.57	0.22	n/a
ARC Sterling Balanced Asset (Investment bank)	9.33	0.01	n/a

The takeaway from the above table is that without taken undue risk (shown by the volatility figure) my £50,000 portfolio achieved the best return. In addition, the extra investment risk I took was rewarded by an increased return when compared to the risks taken by other strategies (illustrated my portfolio having the highest sharpe ratio). Other strategies' risk/return balance is inferior to my portfolio.

Profit from a 2 year 80-20 Investor membership

The table below shows how much extra profit (net of the 80-20 membership fee and fund charges) I made using 80-20 Investor vs other strategies. Don't forget that the 80-20 Investor membership is a fixed price and so doesn't increase just because you invest more money. All figures are net of fund fees and the cost of a biennial 80-20 Investor membership:

	Amount invested
	£20,000	£50,000	£75,000	£100,000	£250,000
£50k challenge overall profit	£3,458	£9,077	£13,760	£18,442	£46,537
extra profit over a Passive Vanguard benchmark	£312	£1,212	£1,962	£2,712	£7,212
extra profit over a balanced IFA portfolio (AFI Balanced Index)	£588	£1,902	£2,997	£4,092	£10,662
extra profit over an Average managed multi-asset fund	£1,008	£2,952	£4,572	£6,192	£15,912
extra profit over the cautious IFA portfolio (AFI Cautious Index)	£1,344	£3,792	£5,832	£7,872	£20,112
extra profit over an Investment Bank Discretionary Portfolio (ARC Sterling Balanced Asset Index)	£1,592	£4,412	£6,762	£9,112	£23,212

The other thing to bear in mind is that IFAs will typically charge you an extra 0.75% to 1% of your portfolio size each year to run your money which the above figures do not take into account. So their performance is overstated. In addition not only did the passive strategy have a higher volatility but it had larger drawdowns (falls) than my portfolio.

My outperformance after 8 years

I first started running my portfolio back in March 2015 and I have now passed the 8th anniversary of doing so. That is a long time period with which to demonstrate my track record of managing my money using 80-20 Investor. This period included challenging market-moving events such as the Brexit referendum, the US election, the US-China trade war, the coronavirus outbreak and the war in Ukraine. The table below shows how my £50,000 portfolio performed over the eight years (up to the end of August 2023) versus the same benchmarks I used earlier. It is now worth £75,245.

Name	March 2015 to August 2023 profit %	Sharpe ratio (annualised)	Volatility (annualised)
50k challenge	50.49	0.14	9.04
Average professionally balanced managed multi-asset fund (Mixed Investment 40%-85% Shares Index)	43.20	0.08	9.29
Passive Vanguard benchmark (passive strategy)	38.99	0.04	8.88
AFI Balanced (IFA's balanced portfolio)	38.43	0.03	9.38
AFI Cautious (IFA's cautious portfolio)	27.03	0.00	7.38

My outperformance has been achieved by following the asset allocation suggested by the 80-20 Investor algorithm and having a concentrated portfolio of funds. For example ahead of the EU referendum I reduced my exposure to UK and European equities, which was a bold but ultimately correct call. Following the pandemic I rotated into technology funds and then into value funds to take advantage of the shifts in consumer behaviour. In 2022, I reduced my equity exposure and removed my exposure to bonds almost entirely ahead of both markets slumping. Of course, as you can appreciate, there is no performance guarantee with 80-20 Investor as returns are dependent upon market conditions.

But it doesn't stop there…

I continue to run my portfolio live for 80-20 Investor members. In fact you can see exactly how my portfolio is currently invested when you take out your free 30 day trial of 80-20 Investor which you can cancel (at a click of a button) at any time.

Finally…

If you aren't ready to take a free trial of 80-20 Investor then I have created a free short email series that teaches you how to successfully invest your own money. You will receive a short two minute email each day for 10 days. By the end of it you should be confident enough to decide how to invest your own money. You can sign up here.