Seeking Alpha

Martin Vlcek's  Instablog

Martin Vlcek
Send Message
Martin Vlcek is a full-time investor and analyst that has been actively investing and managing money for more than 15 years. His primary investment focus is on undervalued stocks with favorable risk to reward ratio and upcoming catalysts. Martin’s investment philosophy is to hold a highly... More
  • My 2013 Growth Portfolio Performance: 113% Return Before Taxes 2 comments
    Feb 20, 2014 1:28 PM

    General stock markets in 2013

    2013 was a spectacular year for many investors who were invested in the U.S. stock market. I consider 2013 to be an outlier and don't expect a 30% return for the broad U.S. S&P 500 stock index in 2014 but rather a +10% to -10% return, with +5% being the most probable outcome. However, a black-swan event is not out of question, so buying a partial cheap tail-risk protection is prudent this year.

    My Growth portfolio performance in 2013

    My growth portfolio returned roughly 113% in 2013 including all trading fees and costs, but before taxes. My actual money-weighted return including fees but before taxes was "just" 88% due to cash deposits and withdrawals. I didn't try to time the deposits/withdrawals, I just moved the cash according to my personal needs. However, this just proves the obvious, that trying to time the market - whether intentionally or not - can hurt your performance. But it can improve your returns, too.

    Important word of caution

    Please note that although this Growth portfolio represents all my investment funds, they represent a relatively small portion of my total net worth. Hence, the high risk and volatility of this portfolio is balanced by significant low-beta, income-oriented assets in my other holdings, such as savings accounts, certificates of deposits and real estate. Investors need to carefully consider, whether a high-beta investment portfolio should be a suitable part of their net worth, and investors should certainly carefully consider the total size of such portfolio in relation to all their net worth to make sure they are not exposing themselves to excessive risk.

    2014 outlook

    For my personal portfolio, I expect much lower returns in 2014 and my strategy for this year includes protecting some of the spectacular percentage gains that I achieved in 2013.

    I also intend to position my 2014 investments more conservatively due to generally prevalent high market valuations that present a risk of multiple market-wide pullbacks affecting majority of asset classes.

    (click to enlarge)

    My portfolio performance in 2014

    January 2014 started off with a sharp fall in my portfolio towards the end of the month. As of February 20, most of the January losses were recouped but I am still roughly 15% below the peak 2013 levels.

    May 2014 update

    The Growth portfolio is still down roughly 10% from its 2013 peak, which is an improvement from February 20, but still gives a negative YTD return of almost minus 10%.

    My strategy for 2014 hasn't changed; I am still protecting the impressive 2013 gains and waiting for favorable opportunities, which have been rare for my investment taste so far this year.

Back To Martin Vlcek's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (2)
Track new comments
  • The Behavioral Economist
    , contributor
    Comments (751) | Send Message
     
    Congratulations on a fine 2013, and best of luck to you in 2014. I hope that your conservative consolidation strategy in 2014 reaps rewards.
    26 Feb, 07:20 PM Reply Like
  • Martin Vlcek
    , contributor
    Comments (323) | Send Message
     
    Author’s reply » Thanks!
    2 Mar, 12:02 AM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.