It has come to the end of the year and I’d like to share some tips from my mentors on how you should do a year end review on your investment portfolio. This is something i find that a lot of investors do NOT do and it shocks me. If you plan to improve on your investment performance and to have a better year ahead in 2015 reviewing the hits and misses of 2014 is absolutely essential.
Have a look at your portfolio for the year and first look at it in a macro point of view. What are your overall portfolio returns for the year? As of 26 Dec 2014 for the full year the Dow Jones Industrial Average has posted a gain of 9.8%. That would be your market returns. This would be your benchmark standard to beat at least as an investor. Have you outperformed or underperformed the market? If you have underperformed the market maybe you ought to want to take a serious look at your portfolio. You just might be doing something wrongly.
Now to zero in and look at it in a micro point of view. Look at some of the trades you have made in the year. What are the best trades you have made and which stocks have you milked the best returns from? Conversely do the same thing for the stocks which you have possibly made losses on this year. Ask yourself this simple question. Why did you buy the stock in the first place and does that reason still hold true today?
If the reason holds true today you might want to even increase your position in the stock. A simple example i would give you from my own portfolio is when i first bought the crude oil ETF. After the oil price plunge i bought the Oil ETF but the ETF has since fell another 25%. Does my reason for my purchase still hold true? The answer is Yes! So since then i have added more positions on the ETF to lower my average buying price.
I would highly recommend that you actually type out the lessons you’ve learned from your individual stocks in a word document. This way it will really rekindle your memory and serve as lessons you can learn from as you place your trades in 2015. Don’t just read this and forget about it. Get your trading account open and actually start reviewing. If you’re serious about wanting to improve your performance then DO IT!
If you’re not yet a student of mine and would like to learn from me in one of my upcoming workshops please just fill in this simple form HERE and i will get back to you on the dates for my next workshop!
Here’s me wishing you a fantastic, prosperous new year! 😀