Do you look back at your investment past performance ?

[scotview]

Most of the discussion on this site relates to forward planning for your financial future, for example, like the recent post on retirement time horizon.

My main retirement income is from DB pensions and some dividend income. Since retiring early I have kept a record of my various sources of income on a cumulative basis. This provides me with a measure of how successful, or otherwise, my decision to retire early has been and to a greater extent removes peer envy.

How important to you is looking back at your investment performance or do you consider retrospection to be futile and the only way is to look forward.

I hope my question is sensible and that you understand the point I'm trying to get across.

[Dod101]

On 1 January most years I review the year but mostly for planning any changes for the future. I need the investment income and that is my main focus but I am also only too well aware that I need the capital to grow over say a five period and to that end most of my portfolio is for income but about 20% or so is for Growth.

I do not care how successful past decisions have been except to try to improve things for the future. I am not entirely sure otherwise what you are getting at.

Dod

[tacpot12]

I do look back at past performance. Although people say that past performance is no predictor of future success, I don't think that is entirely true.

When I retired I decided that I would not make any impulsive changes to my portfolio, having spent a long time thinking about how to construct it in the first place. I am still (five years on) in a phase where I want to see if the market will recover. All my investments are down to some degree, but some are down more than others, however I think this just reflects their greater volatility and not a fundamental weakness. Even my poorest performing funds (from an asset value pov) are producing more dividends than I expected them to.

[Arborbridge]

Most of the discussion on this site relates to forward planning for your financial future, for example, like the recent post on retirement time horizon.

My main retirement income is from DB pensions and some dividend income. Since retiring early I have kept a record of my various sources of income on a cumulative basis. This provides me with a measure of how successful, or otherwise, my decision to retire early has been and to a greater extent removes peer envy.

How important to you is looking back at your investment performance or do you consider retrospection to be futile and the only way is to look forward.

I hope my question is sensible and that you understand the point I'm trying to get across.

As I think you probably know, I constantly measure my portfolios and often post the results, the latest thread being here:-
viewtopic.php?f=31&t=40990

[DrFfybes]

I occasionally do a spot valuation to see if I'm up or down significantly, and perhaps a couple of times a year I delve into the portfolios and weed out anything that seemed like a good idea at the time but has been stagnant - CTY and a FTSE 250 tracker were recently culled and moved into VHYL.

But generally I don't look at how my choices have done individually over the years as there' always something in there to depress me As long as there's 'enough' to meet our lifestyle then I don't really care.

Paul

[edited for spelling and managed to delete a sentence]

[tjh290633]

I do a valuation of my portfolio at the close of each day that the market is open. The reason is that I wish to make sure that no share gets overweight. This can happen quite rapidly on occasions. I also wish to decide where accumulated dividends are reinvested, my method being incorporated in the HYPTUSS.

The other factor is to predict what the dividend income might be in the next year. I assume no change in dividend per share until one is announced. I also assume that special dividends will not be repeated in the next year. I keep a rolling spreadsheet of dividends, showing an increase (green background), no change (white background), reduction (yellow background) and passed or cancelled (red background). Periodically, usually when I have made a purchase, I change the dates (announced, XD and paid) of dividends already received by advancing those dates by 12 months and sort the table by date of payment. This gives me my own forecast.

If you go back to the 2008-10 period, the colour red appeared frequently. More recently yellow and white have been more frequent, as dividends are held level or reduced. I unitise my portfolio to eliminate the effects of capital addition, more frequently these days of cash withdrawal.

My opinion is that, while weekly might be a reasonable interval, monthly or annual appraisals are far too wide apart.

TJH

[Newroad]

Twice monthly for me, ScotView.

End of month and (approximately - actually 3rd Wednesday) middle of month. The latter because it is the free regular investing day for II, so when the most movement happens for us.

Seems to give enough granularity for our purposes. It's a little for looking at performance, but moreso to support rebalancing if and as needed.

Regards, Newroad

[Arborbridge]

Just picking up on what TJH wrote: I normally value the HYP and ITs once a week, the OEICS less often as it isn't automatically done, so takes longer.

However, I'm of the opinion that if I didn't check from one year to the next, not much harm would result - the income would still keep rolling in. I can't imagine lasting that long without looking, and there would always be the occasional decision to make as companies change their capital structure or become involved in mergers.

Arb.

[Itsallaguess]

How important to you is looking back at your investment performance or do you consider retrospection to be futile and the only way is to look forward.

A good question, but I think it's important to recognise that 'investment performance' might mean different things to different people...

I don't measure or track 'Total Return' for my individual investments or for my overall portfolio, which is skewed heavily towards an income-strategy approach.

What I do tend to measure though, is 'strategic resilience', which for me personally is a much more important 'performance measure' than any specific 'Total Return' one...

By 'strategic resilience', I mean that I track the following metrics, the majority of which are retrospective apart from the first one, but where that first one is then used later to help provide what's hoped to be an important confidence-boosting retrospective comparison -

• 12-month look-ahead for portfolio-income predictions, based on individual and aggregated forward yields.

• Monthly and 12-montly actual income at individual investment and income-portfolio level

• Take a rolling view on how accurate the previous-year 12-month look-ahead figures were, when post-yearly figures eventually drop out of the actual income-received figures (which continues to provide good forward-looking confidence, as it happens...)

• Chart the rolling 12-month portfolio 'delivered-income' - which gives confidence in terms of long-term income-resilience from the overall investment-strategy

• Record weekly capital levels to provide confidence that my largely income-based investment strategy isn't simply eating it's own capital to provide the delivered income - which was an early issue that has largely solved itself now that I've moved away from single-share income-investments towards an income-IT approach

My income-investment strategy is planned to provide long-term, resilient income for my post-work life, and to do so in a way that is 'almost completely hands off' in terms of long-term personal-intervention requirements.

The above metrics have, over many years, provided me with a lot of confidence that my approach will 'perform' to those demands, with not a single TR-based figure in the mix, other than a watchful eye on the 'eating it's own capital' side of things...

Cheers,

Itsallaguess

[Gerry557]

Yes I look back over my portfolio. It gets checked weekly mainly because I haven't worked out how to automatically update fund prices in my spreadsheet compared to shares.

Also dividends can be booked and then a decision needs to be made on what to do with them. Anything Im thinking of reinvesting can be watched a bit closer if the price is getting close to my buy area.

Yesterday Rentokil was down nearly 20% so if I was interested that might be a starting point for investigation into a buy or sell. I have on occasion set up a camparision of two shares if I have sold one and rebought another just to see If I made a good or bad decision, mainly in the short term.

I keep an income history as this was always about providing an income should I be out of work and or retired. So I keep annual measurements etc. The current year also does a comparison to last years and I look to see if it's more and if not, why?

I did colour code the income during covid as there was a drastic change in payouts. I remember adding to LLOY as they changed to quarterly income only to see that plan fail. I suppose it highlights an issue of having some sort of reserve for black swans and or buying more. Dry powder as you might say.

Cash has started to come back and if inflation falls a bit lower it might be a positive investment for short term.

I like the idea of colour coding the change in dividend rates and might introduce that for next year. I keep a note on the spreadsheet of all previous dividends but a colour code might be a useful and quick method with the details in the note.

I suppose we tend to keep records of previous spending and maybe plan future spending so you can ask the what if questions. Although I note not everyone does this. Lots just seem to muddle on somehow with no idea of their coming and goings awaiting the next paycheck.

I think prople on lemon are more likely to be planners otherwise you wouldn't be here you'd be doing whatever you do saying 10 more days and I can do it some more.

I know I had a dividend yesterday and need to pay for something so will start a bit of the weekend update this morning.

[Itsallaguess]

Yes I look back over my portfolio. It gets checked weekly mainly because I haven't worked out how to automatically update fund prices in my spreadsheet compared to shares.

Does this help? -

https://www.lemonfool.co.uk/viewtopic.php?t=25025#p336483

The HYPTUSS VBA password is 'pleaseletmein' if you want to use the above fund-pricing process in your own spreadsheet.

Cheers,

Itsallaguess

[Arborbridge]

Yes I look back over my portfolio. It gets checked weekly mainly because I haven't worked out how to automatically update fund prices in my spreadsheet compared to shares.

Does this help? -

https://www.lemonfool.co.uk/viewtopic.php?t=25025#p336483

The HYPTUSS VBA password is 'pleaseletmein' if you want to use the above fund-pricing process in your own spreadsheet.

Cheers,

Itsallaguess

Well, it certainly works for me! I keep all my income ITs on a HYPTUSS and it works just fine.

Arb.

[Itsallaguess]

Does this help? -

https://www.lemonfool.co.uk/viewtopic.php?t=25025#p336483

The HYPTUSS VBA password is 'pleaseletmein' if you want to use the above fund-pricing process in your own spreadsheet.

Well, it certainly works for me! I keep all my income ITs on a HYPTUSS and it works just fine.

Thanks Arb, but just for clarity - Gerry was talking specifically about automatic FUND prices, and so was I, but is that actually what you also meant as well in your reply above?

Cheers,

Itsallaguess

[flyer61]

At 62 I do look back at all sorts of things. When it comes to investments I look back and think about what has worked and what hasn't. Ergo why I like Terry Smiths basic principals to selecting Companies that I might want to own a part of. As to where I find myself today after 40 years of trying to build a portfolio with legs to live off, I could have done better. However there is no point in beating myself up about it and I am truly grateful that I will retire on an income substantially more than my salary.

Chasing and I mean CHASING yield is a mugs game. The Tortoise for the average Joe (I count myself as very average) is the way forward.

[Gerry557]

Thanks for that. I will have a look at the weekend

[tjh290633]

At 62 I do look back at all sorts of things. When it comes to investments I look back and think about what has worked and what hasn't. Ergo why I like Terry Smiths basic principals to selecting Companies that I might want to own a part of. As to where I find myself today after 40 years of trying to build a portfolio with legs to live off, I could have done better. However there is no point in beating myself up about it and I am truly grateful that I will retire on an income substantially more than my salary.

Chasing and I mean CHASING yield is a mugs game. The Tortoise for the average Joe (I count myself as very average) is the way forward.

There is a difference between chasing yields and investing in companies with higher than average yields. Back in the 70s, before they went bust, Rolls Royce had a very high historic yield. The market knew that they were in trouble and reacted accordingly.

This takes us back to the discussions about when a yield is too high.

TJH

[simoan]

At 62 I do look back at all sorts of things. When it comes to investments I look back and think about what has worked and what hasn't. Ergo why I like Terry Smiths basic principals to selecting Companies that I might want to own a part of. As to where I find myself today after 40 years of trying to build a portfolio with legs to live off, I could have done better. However there is no point in beating myself up about it and I am truly grateful that I will retire on an income substantially more than my salary.

Chasing and I mean CHASING yield is a mugs game. The Tortoise for the average Joe (I count myself as very average) is the way forward.

There is a difference between chasing yields and investing in companies with higher than average yields. Back in the 70s, before they went bust, Rolls Royce had a very high historic yield. The market knew that they were in trouble and reacted accordingly.

This takes us back to the discussions about when a yield is too high.

TJH

Not really. It should start a discussion on investing in companies with too much debt. With a much higher interest rate environment now, it’s more pertinent than has been the case since the GFC. If you do look back, looking exclusively at the things that went badly wrong would be my advice. Almost always it will come down to companies with awful balance sheets and too much debt that only still exist due to massive shareholder dilution through a rights issue. Judging a company by the dividend yield tells you nothing about the balance sheet (many companies pay large dividends in good times when they should really be paying down debt) and will not help you avoid future disasters.

[dealtn]

Judging a company by the dividend yield tells you nothing about the balance sheet (many companies pay large dividends in good times when they should really be paying down debt) and will not help you avoid future disasters.

Judging a company by its dividend (yield) alone also tells you nothing about its profit and loss account, or cashflow statement. Ignorance of all 3 major ways a company presents its financials seems an odd way to go about investing to me.

[Arborbridge]

Well, it certainly works for me! I keep all my income ITs on a HYPTUSS and it works just fine.

Thanks Arb, but just for clarity - Gerry was talking specifically about automatic FUND prices, and so was I, but is that actually what you also meant as well in your reply above?

Cheers,

Itsallaguess

Sorry, my mistake. Not funds as in OEICS, is wrongly used funds meaning ITs.

[midgesgalore]

...
How important to you is looking back at your investment performance or do you consider retrospection to be futile and the only way is to look forward....

I don't unitise.
For income investments:
I keep a front sheet summary of my stocks in a spreadsheet itemising average cost, value, purchase cost total, rolling year dividend, accumulated dividends since purchase, yield on last rolling year, total return, %income contribution. There is, lately, columns for Xd date, payment date, payment amount coming in the current month (which I record and tally for the current year). Hence I know if my income is rising or falling year on year.
I can also keep a monthly record of cash sitting in ISAs and SIPP as resources for new investments (or income if required)

The spreadsheet has a separate sheet for every stock and all the items required for the summary sheet, recording purchase price, quantity of shares, dividends (+payment and Xd dates against the dividend - working out the annual % change) All this stuff can be used to provide the inputs in the summary sheet.

I use conditional formatting to highlight losing total return or value minus purchase costs and so forth.
It sounds a lot but quite easy to maintain and provide me with useful information at a glance - or, well, without digging into the guts of the individual stocks records.

midgesgalore