The history of the money in this portfolio actually dates back to March of 2003, which was the same month that the most recent Iraq war began. The S&P 500 index is actually up about 50% since then, which represents a compound annual growth rate of 8.6%. At that time I socked away the first $500 to start what was then a mutual fund portfolio. I had earned the money working at my first full time job, right out of university. I likely had several other avenues where the money might have been better spent (paying off student debt, saving for a house, or replacing some 'student' furniture), but I wanted to get into the market in some way for the future so I opened the account. As I've mentioned before it's too bad I waited until I graduated from university to put some money away and begin to learn about investing. Five years later, this portfolio has morphed into a group of investments that my wife and I add to very regularly and value dearly for our future financial success.
Today marks the end of the first half of 2008, a good time to update our portfolio. I really can't believe it has been over 2 years since I started the portfolio as it is in its current form. Seems like yesterday, and in the grand scheme of time that should be invested in stocks it is really insignificant. This portfolio and most of the stock within it will be held for at least 15 years or more. Now to the Review...
2008 Returns To Date
The headline number here is -15.3%. That's right our portfolio is down a whopping 15.3% since the start of 2008. This compares poorly with the -12.8% return of the S&P 500 index, as well as the -8.6% return of the XDV (an ETF that tracks Canadian dividend paying stocks). Brutal numbers here...
Dividends and Yield
Our portfolio is now yielding a whopping 4.8%. This essentially means that we are being paid an amount equal to 4.8% of our capital annually. We're currently being paid $1,993.03 in dividends and distributions per year. Alternatively $5.46 per day is a fun way that I like to represent this. This is about 125% more than we were being paid last year at this point. I like to refer back to dividends and yield instead of paper portfolio value, when the market gets tough, as it has been lately. My favourite graph, our income from investments graph keeps on moving up despite the current markets.
Click on the pie chart below for current details.
Looking ahead I'm going to keep trudging along through this difficult market. Hopefully I will have some money available later on in the year to take advantage of the plethora of cheap stocks out there. The fact that the markets have been so ugly is actually a positive as I expect to invest a lot of money in 2009, and I'll be able to buy more dividends for every dollar I invest if the market declines persist. Very shortly our income from investments will reach $2,000 per year, which will be a nice milestone. For more on my mentality with this portfolio, check out my investment philosophy.