It’s the year-end holiday season so its time to round off the year with my annual Performance Scorecard
Let’s begin with my bread and butter – Investments.
Portfolio @ December 2020
Number go up
December turned out to be a less dramatic month than previous months, with my portfolio increasing $10,395. This was driven largely by crypto and REIT gains, offset by losses by Alibaba following the announcement of the anti-competition probe in China.
Consequently, my portfolio closed shy of all time highs at $583,797.
BTC busts all time highs
Last month, I mentioned that BTC was a pretty binary trade, either it busts through ATHs convincingly or it falls flat on its face if rejected. Thankfully, the former situation played out. Once BTC crossed $20k, it was just a bee line towards new ATH to new ATH.
In fact, BTC experienced a Santa rally, with BTC setting ATHs since Christmas day. Maybe the season of gathering helped spread BTC hype lol.
A year of Endowus
As you might know, I’ve invested CPF OA funds in Endowus since early January. YTD it has performed reasonably well for a passive strategy, giving me a 19.3% return overall. Good stuff.
If you want to learn more about Endowus, do check out my review (Cash/SRS/Fund Smart portfolio details to be updated). Also, if you’re interested in opening an account, do feel free to sign up through my referral link. We will both receive $20 off access fees per referral.
2020 Annual Review
Next, let’s take a look at my annual performance. I’ll be relying heavily on Stocks.Cafe to provide my performance computations for my stock portfolio. I don’t provide return metrics on my crypto portfolio per usual.
2020 has truly been an unprecedented year. I would have never imagined that I would have more than doubled my portfolio value this year.
There are some important caveats though:
- Merged my crypto portfolio into my stock portfolio this year.
- Deployed significant sums of capital into the Covid-19 REIT sell off
- Recycled most of my REIT gains and capital into Crypto in July
Consequently, the final portfolio value is quite distorted for comparison purposes. That said, based on my calculations, I’ve managed to more than double my capital injections this year.
This makes it my most profitable year yet.
Detractors may say that a lot of it is mainly paper crypto gains, and I’m inclined to agree. I’ll only truly start celebrating when I actually start cashing out these gains. There’s still a long runway though.
XIRR and TWR (Traditional Portfolio)
My XIRR and TWR for this year are 16.07% and -8.92% respectively. This shows why these 2 measures can give very different results, with XIRR rewarding good investment conviction (by position sizing) and TWR rewarding good timing.
As such, you can see that I have terrible timing while having decent investment picks, which is something that I completely agree with. At the end of the day, what’s important is that you make money, which is why I prioritise XIRR.
Dividends (Traditional Portfolio)
I was pleasantly surprised that I managed to match dividend performance from last year, considering that many REITs withheld dividends this year. With my transition to crypto, this metric will probably stagnate in the future.
However, if REITs start paying out the income retained, this metric may go up. Let’s see how things go tomorrow.
What a year
2020 has certainly been bittersweet on a personal level. My investment portfolio did great, but I lost my job. Although investment gains more than covered the loss of income, the stability and safety net of a regular salary is gone. Add to that the Covid-19 pandemic, we have the strange phenomenon of travel plummeting and WFH being the default norm.
Personally, the effect of these changes has made me a hermit at home. The days start to blend together and the year went by in a blink of an year.
It felt like the world decided to put a pause on my career, so I’ve taken the time to take a break from work and focus my time on studies and learning new skills. I’m in no rush to take my next step of my career. This is because I feel that I’m at an important juncture where my next move will define my career for the rest of my life.
We’ll see how things go in 2021.
Greatest wealth transfer in history?
I’ve been thinking about this topic a bit in the past month and I can’t help but think this is true.
Given how the stock markets have performed (the US in particular), the insane money printing conducted by the Fed this year and job losses due to the Covid-19 pandemic, I imagine the global wealth gap has widened significantly this year.
The poor have little to no capital to participate in capital markets and are the most impacted by job losses. The money printing doesn’t help as the weakening USD affects their spending power on imported goods.
On the other hand, the rich continue to draw their huge pay cheques and have the ability to put money to work in the Covid-19 selloff. They are able to take advantage of the opportunities offered to expand their net worth even further.
Will this have an impact in 2021 and beyond? Widening inequality is never good for social unrest. We shall see if these tensions will manifest itself in the near future.
I’ve been reading some predictions for 2021 by various influencers and thought I’ll join in the fun. Thing is, I’m terrible at it so don’t take it as fact.
Pullback for US market / High PE stocks in Q1
This is something that I feel will likely happen. We are due for a pullback and consolidation in Q1, given the non-stop bullishness in the US markets. Expensive valuations don’t help too.
Calendar effects + expensive valuations is a volatile mix, and I expect a pullback as a result.
I might seem biased by making this prediction, but I’m fairly confident in this. That said, this prediction is a nuanced one.
I am more bullish on certain types of crypto than others, while continuing to be bearish on other types. Here’s a rough summary:
- Bullish BTC on continued adoption by institutional investors and corporates
- Bullish ETH on the discovery of what you can do with ETH
- Very Bullish on core DeFi protocols and builders. This is largely on improved usability and discovery by more users
- Neutral to bearish most DeFi shitcoins / experiments
- Bearish ghost chains, usually 2017 ICOs and L1 chains that not many people use and have little development going on.
- Bearish XRP, especially now that its being sued by the SEC.
That’s all I’m going to say on this prediction. If you don’t understand anything, read up for yourself. If not, feel free approach me in private to clarify.
Overall, I’m happy with the financial outcomes from 2020. While losing my job sucks, I feel that it came at a decent time to reassess my career direction. One thing I feel a bit guilty about is not writing here as much as I used to.
I’m resolved to correct that in 2021, with some new features in the works. So stay tuned.
Wishing all my readers, happy holidays!
Mid November 2020
2019 Performance Scorecard
2018 Performance Scorecard
2017 Performance Scorecard