My Portfolio Plan Following A Horrible Year

Oct. 19, 2011 10:22 AM ETYNGFF, ORVMF, DCHAF, REE-OLD, HHC, RHDGF, GRVY15 Comments
Jae Jun profile picture
Jae Jun

Let me start off by saying that 2011 has been a horrible year. Under-performance is an understatement, but I am learning many lessons which is vital to each investment year that goes by. It would be easy to brush this year off as a bad year and look forward to a new start, but that’s what mutual funds do.

By the end of Q3, my portfolio was -30.5% compared to the benchmark of -8.3%.

Click images to enlarge

Since inception, my portfolio is up 122% on a cumulative basis, which also comes out to a compounded basis of 22%. I started off the year at a compound rate of 47.7% which has since declined dramatically, but to think that I could have sustained such high levels would have been a dream.

Here is another view of the graphical performance. The volatility in my portfolio is extremely high as I tend to focus on illiquid and small caps. I’ve also invested in bankrupt stocks which tends to shoot up or down by huge amounts in a single day.

-19% in 1 Month?!

At the beginning of the year, I made a bet that the economy would continue to struggle, and despite the fact that the US is a fiat currency system, I was willing to make a bet on gold. Had I invested in the physical metal, my portfolio would look vastly different. Instead, I went with junior gold miners. With gold hitting record levels I anticipated that the miners were extraordinarily undervalued. The ones I were looking for were the ones that had cash flowing production, assets to back up and support the business if things got difficult, and a low chance of dilution.

However, what was cheap got cheaper. Junior miners are synonymous with volatility and as gold and silver margin

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Jae Jun profile picture
We seek undervalued and under-appreciated stocks to go long before the market catches on. By using our universe of stock ratings and methods to quickly compress our list, we look for the best opportunities to build wealth through the stock market.

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