Wednesday, 14 March 2012

Barnstorming start to 2012: Portfolio snap.

A barnstorming start to the year for global markets has still not taken more than a gulp for breath which makes it very difficult not to get caught up in the excitement when seeing potential additions starting to move away from the price range at which they initially come onto my radar.
As a result, I find myself needing to take a deep breath and look at the collective performance of my portfolio and content myself that, as at close of play on the 13th March, it is still performing better than the FTSE100 average.

31/12/2011 31/01/2012 29/02/2012 13/03/2012
Merchant Adventurer's Index 1409.55 1439.24 1520.8 1557.61
Monthly gains
2.11% 5.67% 2.42%
Year to date
2.11% 7.89% 10.50%

FTSE 100 5572.28 5681.61 5871.51 5955.91
Monthly gains
1.96% 3.34% 1.44%
Year to date
1.96% 5.37% 6.88%

And, as the MA Index started at 1000 on the 31 Dec 2009 you can see that, at 1557.61 (an all time high until today), it is up 55.76% in just under 27 months with dividends re-invested.
Over the same 27 month period, the FTSE100 has risen just 10.03%, from 5412.88 to 5955.91, excl. dividends.

Click to enlarge, X to return.

It re-inforces my view of the significant contribution that re-invested dividends can make to growing and diversifying a portfolio particularly when the headline index appears to be trading sideways.

Still lots of doubt around to derail the recovery but at the moment markets appear to be shrugging off any cautionary news like China's reducing growth forecasts, and sovereign debt updates.

It has also been a heavy reporting season (particularly in the US) with lots of sectors reporting end of year numbers. And, with most results generally meeting expectations, markets have embraced any "green shoots of recovery" that might have appeared in economic data as if they were beanstalks.

Suffice to say that, against the backdrop of complementary results and economic data, markets have often shown post christmas first quarter rallies (even extending to the mid year in 2011) but without a constant stream of good newsflow or a benign environment then this is difficult to maintain.
Lots going on this year with presidential elections, ongoing sovereign debt concerns, bank's capital liquidity (last night Citigroup was reported as having failed recent US stress tests), slowing growth in China, Iran etc. 
Most of which, along with quantitive easing, will be concerns for many years to come.

So any new investments need to be very selective to ensure that they are not over bought in the rally that may be "floating all boats" but it is a nice feeling to be part of it so I will enjoy it while it lasts and take some comfort that we might actually be starting a recovery. 

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