01-11-2020, 11:06 PM
(01-11-2020, 06:14 PM)lucas03 Wrote: month ago I was asked, whether I know if I outperform index with my "active investing". Whether with passive investing to SP500 I wouldn't be doing better. I didn't know the answer, I remember that I expected to be doing 8% a year on average, so I was happy with my current 17.6% XIRR.
Today I got to it and tried to calculate what would be the result if I would be buying SPY instead of individual stocks. To my surprise, SPY would outperform me by 2500 USD on my ~29k portfolio. I might have higher dividend yield, but that does not make significant difference. Also numbers are not precise, as for SPY I only use monthly prices, but it should more or less match.
https://www.digrin.com/portfolio/24-dgi/performance/
EDIT:
ok, it's just 600 USD below. I head a 700 usd sell transaction in December 2018 and in new page I was calculating it as buy transaction for SP500 ETF. This was previous version of graph - https://monosnap.com/file/XTh7FwEF5QzM2f...4bUspWCOyT
I don't overly concern myself with beating the Index. I do think you owe it to yourself to track it though. When the market is in full blown " risk on" mode, the chances of you beating with a large number of dividend holding is very slim. Watch what your port does in a down market vs the index. The money you don't lose matters too. Those years when the market is down 5% those dividends will look good. When the market goes truly bearish, high quality DGI stocks may outperform by a wide margin. IMO you still have to be mindful that your entry price always matters in the end. Pay a much too high PE for even an Aristocrat at the end of a ten year bull and your protection may not be there. I don't care if everybody will still be buying toothpaste, gasoline and soda pop. Pay way too much for the stock and see what happens. Just my opinion.