Review of 2014

It is that time of year. When the dust has settled on one year and we begin to look at what the next year may offer us.

But first, let's disturb the dust on last year one more time. How well did I do in hitting my 2014 targets?

Goal 1: Invest at least £12,000 in 15 companies

This goal was progressively increased as the year went on. From £6,000 in 10 stocks and £8,000 in 12 stocks. Despite this constant revision, my heftily raised final target has been easily surpassed. 

In terms of value, At the end of the year I have invested £15,606.02. Over £3,600 more than my final target.

And how many holdings in total? Well, these funds are in total of 19 equities. 

This is an excellent start with Goal 1 being well and truly ACHIEVED.

Goal 2: Portfolio yield of 3.5% or more

This is based on the yield on cost of the total dividend paid over the the last 12 months rather than that actually received by me (for example, I may have purchased stock after an ex-dividend date).

Here again I have done very well with a yield on cost of my portfolio sitting at 4.26%. This is over 0.75% higher than my target for the year.

ACHIEVED

Goal 3: Earn £350 in dividend income

Again this target has been revised upwards several times during the course of the year from a modest £200 to an equally modest £250 until I decided to stretch myself at the end of year to £350.

But have I hit this target. Well with a total £331 coming in throughout the year I have fallen a little short of this final target. However, I did manage to achieve a total of 94.5% of this target. Not bad for my first year.

FAILED.

Goal 4: Beta volatility of 0.85 or less

As the markets got a bit more volatile as the year went on I decided that I should revise my Beta volatility target for my portfolio. At first it sat at 1 which I then shifted to 0.9 and, finally, 0.85.

So how did I do? Well indeed, at the end of the year my portfolio volatility sits at 0.82. This is quite a nice feeling as it means that, hopefully, if 2015 continues to show high levels of volatility across markets I should find myself a little safeguarded from its worse excesses. We will see!

ACHIEVED

Goal 5: Portfolio across 9 or more sectors

This was included to provide some diversity to my portfolio and, again, was revised up during the year from 5 to 9 different sectors. 

Did I manage to find companies worth investing in this variety of sectors? I most certainly did. In total, my portfolio is spread across 10 different sectors. 

However, it is noticeable that I am very heavily weighted towards 3 of these sectors (Financial, Consumer Staples and Healthcare) with them composing nearly two-thirds of the portfolio. This is something I may look to address throughout next year.

ACHIEVED.

Goal 6: Weighting divergence less than 17%

This one was introduced after I noticed that the drop in GlaxoSmithKline's share price meant that I was very heavily weighted towards this single company. As a consequence, I wanted to try and reduce the preponderance of GSK in my portfolio a little. In this case no more than 17% more than the average portfolio stock weighting.

Did I achieve this?

Yes is the simple answer. With my potrfolio filled with 19 companies my average portfolio holding size--if all were equally weighted--would be 3.95%. However, my largest single holding (GlaxoSmithKline) takes up 18.74% of my portfolio. This means that my portfolio divergence currently stands at 14.79%: over 2% less than my target.

ACHIEVED.

Overall Performance

So how have I done overall. Well with 6 goals I have achieved 5 of them at the end of the year. However, even my failed goal of hitting £350 in dividend income throughout the year was a revised one after having hit my previous targets. Consequently, although I fell short in this regard I still can feel comfortable that all my targets have at some point in the year been hit at some point. This bodes well for 2015!

[Creative Commons image reproduced from Flickr user Gablif]

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