2018 Report Card

January 24, 2019 Wyatt
Posted by Wyatt on

Vanguard Total World Stock ETF (VT):                   -9.76%

The global stock market saw a return of volatility in 2018. Markets started out strong in January climbing to high reached on Jan 26th. The Jan 26th high was followed by a correction -10.62% correction. Markets would never recover back to that Jan 26th high. Volatility remained very high and in Sept another major selloff in markets began and we had the second correction of the year -11.49%. Markets stabilized a bit over October and November only to experience another major selloff beginning in December of -13.13% before they started to regain some. If you look at the decrease in markets beginning in Sept through Dec as one movement rather than two separate corrections, then there was a -19.49% drop in markets. The technical definition of a bear market is -20%. Whether you look at 2019 as a return to volatility with 3 corrections or as a mini bear market I don’t think you are wrong. Either way, 2019 was a reset to markets which brought stocks back to healthier levels for future positive returns.

VT Historical Returns:

  • 2009: +32.65%                                          2014:    +3.67%
  • 2010: +13.08%                                          2015:    -1.86%
  • 2011: -7.50%                                             2016:    +8.51%
  • 2012: +17.12%                                          2017:    +24.49%
  • 2013: +22.95%                                          2018:    -9.76%

2018 Performance for Notable Index ETFs:

  • SPDR S&P 500 ETF (SPY):   -4.56%
  • iShares MSCI EAFE ETF (EFA):   -13.81%
  • iShares MSCI Emerging Markets ETF (EEM):   -15.31%
  • iShares Core US Aggregate Bond ETF (AGG):   +0.10%

W. Swartz & Co., LLC – Managed Strategies

WSTR:   -9.53% (after fees)

  • What hurt performance? – Portfolio was overweight international developed market stocks which significantly lagged US stocks as seen above.
  • What helped performance? – 15% of the portfolio was held in individual stocks which had a positive overall return. Further evidence that individual security selection is one way to create alpha in a portfolio.

BRAVO:   -9.26% (after fees)

  • What hurt performance? – The portfolio was still too closely mirroring the benchmark to have any real outperformance after 1% annual management fees were taken into account.
  • What helped performance? – An underweight to emerging markets which was the worst performing major category of stocks.

Fixed Income:   -1.17% (after fees)

  • What hurt performance? – An overweight to global bonds and to high yield.

Individual Stocks Holdings:   +2.92% (after fees)

  • What helped performance? – 15 equally weighted stocks proved to be significantly different than the greater market especially during downward macro movements.
  • AbbVie Inc (ABBV), Alphabet Inc (GOOGL), Amazon.com Inc (AMZN), Anheuser-Busch InBev (BUD), Bank of America Corp. (BAC), Boeing Co. (BA), Bristol-Myers Squibb Co. (BMY), Walt Disney Co. (DIS), Kroger Co. (KR), Microsoft Corp. (MSFT), Novartis (NVS), Thermo Fisher Scientific (TMO), 3M Co. (MMM), JP Morgan Chase (JPM), CVS Health Corp (CVS)

Wyatt Swartz

January 24th, 2019