Performance review a dividend portfolio 2016 Q3

This is performance review from my stock portfolio over last five years. To be fair portfolio has not been fixed these years and first two I was more or less searching the suitable strategy.


Here are the numbers from Interactive brokers portfolio analyst tool

The numbers

percentages Performance review a dividend portfolio 2016 Q3

And here is a 12month plot versus typical ETFs/ indices:

12 month chart

cumulative_2016_q3 Performance review a dividend portfolio 2016 Q3

You can see that my portfolio took a heavy dive at start of the year. This all because leverage used. Dividend stocks them selves are more protected against market down side. I did some checking the return charts and notices that they are calculated in EUR in last chart. This means that you need subtract about 5 percentage units to match the 1 year value in dollars. Euro has been losing value against dollar and this has been a benefit for USD based securities in EUR denominated portfolio.


I do not very actively manage the portfolio. I instead try to build my custom smart beta index fund from stock focusing on dividend income. On top of that I use some leverage. I tend to increase leverage in small bursts and wait for dividends to do their thing. Alternative way would be to try to keep leverage ratio close to constant. But I do look at the leverage ratio and overall market sentiment when I plan to increase the leverage. Using leverage has been great over the last years due to very low interest rates. I will have to think whether I want to lower the leverage when the cost of financing increases.

I have learned that too high leverage is not good for the portfolio because risk of panic sales increases also. My portfolio was down 15% between end of November 2015 and beginning of February 2016. I did sell anything, I just believed in the strategy and it paid of in later months.


In the end I am very satisfied to the result. Effective return has been 19% a year! I don’t assume I can keep this up forever though.


Keep on investing!


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