Damien’s Portfolio performance update December 2015

I've received a number of emails from 80-20 Investor members saying that they enjoy reading my portfolio updates. Of course I know a number of members also copy what I do.

Historically I have tended to write an update on how my portfolio is performing when I made changes to the fund selection. A number of members said that they would also welcome periodic performance updates, even if I wasn't making any fund switches. As ever, I always listen to your feedback so here is the first performance update of many. I am not making any fund switches right now although I may well do in the coming days. If I do I will notify all 80-20 Investor members via email so keep an eye on your inboxes.

You may recall that in my last portfolio update (mid November) that I was the victim of market timing during the month of October. Nonetheless my portfolio continued to outperform the passive portfolio from Vanguard and the average fund manager.

In November I tweaked the portfolio and added a bit more risk and increased the fund equity and global exposure. So did it work? The answer is 'yes', as shown by the chart below (click on the image to enlarge it). My portfolio is the green line while the average 'Managed fund' fund manager is in red and the passive vanguard portfolio is in blue. The FTSE 100 is the black line and is there as a gauge of market sentiment.

The chart shows the performance since I began running my portfolio in March 2015. As you can see despite the various crises we've experienced this year, including a Greek crisis and a Chinese economic slowdown, my portfolio is heading back towards profitability.

I am pretty pleased with that result and as I mentioned earlier, I am not making any fund changes today. It will be interesting to see what will happen into the year end, which is often the best time of year for stock markets.

How 80-20 Investor's Best of the Best Selection performed over the same period

The purpose of running my own £50,000 portfolio is to show people how they can use 80-20 Investor to run their own money easily and successfully. As such I don't religiously hold every fund in the Best of the Best Selection. I already regularly show you how the Best of the Best Selection performs so there's no point repeating the exercise with my own portfolio and just copying the Best of the Best Selection. Instead I prefer to pick around 7-8 funds from the Best of the Best Selection. I also don't always change my portfolio each month. Don't forget, the research behind the 80-20 Investor algorithm baked in the idea that the funds can be held for as long as 6 months if you wish.

The chart below shows how the 80-20 Investor Best of the Best Selection is now in profit, which is a great result given that markets are down. The divergence between my £50,000 portfolio and the 80-20 Investor portfolio is almost solely down to September when I didn't make any fund switches at all. The chart is a great reminder of the power of process.