2024 Annual Report

On Track

2024 Annual Report

Much like the previous year, 2024 was a good year for my portfolio, with it reaching all time highs, a good performance and overall progressing well ahead of my initial expectations when i started investing.

Beginning with the full portfolio, you can see a few changes:

We can see once again the impact of my focus on bringing my index fund allocation higher, and I am happy to report that sometime early in the year I was able to reach my goal of 60% into indexes.

In this case the indexes I’m allocated to are:

• VWCE - An all world fund

• CSPX - An S&P500 tracking fund

I haven’t put any more cash into CSPX since I originally invested in 2021, and have no intentions of doing so going forward. The only reason I haven’t sold it is due to the fact that I would have to pay significant capital gains taxes on that sale.

I prefer the more diversified VWCE option, though I’ve recently heard of a new index fund that is quite similar to VWCE, but has a lower expense ratio and slightly higher diversification, SPYI 0.00%↑. You can find more details on it here.

At the moment I have no plans to enter a position there, since I prefer to keep my portfolio simple, and the high unit price makes it inconvenient to buy in. Still, if I were to start a brand new portfolio, that would probably be my pick.

If we stick to just my actively managed portfolio we see:

Here we see a few significant changes throughout the year:

• INTC 0.00%↑ had essentially recovered at the beginning of 2023, and I was actually in the green a little bit, but the suspension of the dividend and now the firing of Pat Gelsinger has caused the entire position to crash back down to less than half of what I bought it for.

  • I’m currently considering selling the position entirely, since it’s not clear to me if the road the company is on going forward is the correct one. I will wait for a new CEO to be appointed prior to making such a decision.

  • It goes without saying that Intel has been my greatest failure in terms of monetary losses. I’m down over 60% of what I put in, maybe more when you account for options and other costs.

• WU 0.00%↑ used to be a big position but it looks like the company is getting re-rated downward. Personally I don’t see the issue, the company is healthy, generating agreeable profits and meeting and exceeding my GAAP earnings expectations.

  • Technically I’m in the red on capital gains right now, though the dividends received make it a positive total return.

  • I’m keeping it as is, though I won’t rule out increasing the position.

• MO 0.00%↑ had a big jump this year! I made a few purchases here and there, and the re-rating of the company bumped it up quite a few places in the portfolio.

  • I’m happy with the dividends, and performance, and have no plans to either buy more or sell.

• UL 0.00%↑ was sold at the beginning of the year. Obviously It heavily recovered since I sold it, and I would have been better off leaving it be.

  • Ultimately I just re-evaluated the company and didn’t really see where the growth would come from to justify such a high multiple.

  • I still don’t understand the re-rating the stock has undergone since.

• MMM 0.00%↑ was sold when it cut the dividend. As is tradition it recovered since I sold it, and I would have been better off leaving it be.

  • I didn’t expect the spin-off (which I also sold), and the fact that they used it as an excuse to cut the dividend left a bad taste in my mouth.

  • Ultimately I bought this one as a dividend aristocrat that I expected would continue to pay the dividend while paying off debt. It didn’t happen so I decided to sell it since it didn’t match my expectations.

• JXN 0.00%↑ I opened a new position here, if you’d like to see my reasoning, check out this post:

  Jackson Financial (JXN)

• 7575 - I also opened a new position with Japan Lifeline. I actually wasn’t expecting this, but it looks like the unwinding of the Yen carry trade caused it to trigger a couple of my buy orders. It’s only a small position though, which I regret since I’m up 30%!

  Japan Lifeline

• BTI 0.00%↑ I also opened a new position in British American Tobacco. Ultimately the price was attractive, and the position has done well so far.

  British American Tobacco (BTI - BATS)

In terms of dividends received, we have once again reached a new all time high:

You can see a significant gap in Q1 2024, which seems to be due to western Union paying out that quarters dividend in Q4 2023.

That combined with unfavourable FX rates at that time, plus the lack of some heavy Q1 payers which had been sold in 2023 meant that Q1 2024 actually paid out less than Q1 2023!

Fortunately the remaining quarters caught up, and I’m happy to announce that I reached 2546€ in total dividends received for the 2024 year, above the 2145€ received in 2023.

You may notice the numbers don’t match up to the 2023 annual report. I’m not sure why that is, though I suspect it is to do with the FX conversions the software I use to make this does.

If we check the capital gains only:

You can see that I’ve actually made a loss, as a result of the sales of MMM 0.00%↑ and UL 0.00%↑.

The total loss there was about 1000€, but got balanced out by the small amount of options selling I did this year.

Speaking of which, I haven’t sold all that many options in 2024. There is no real reason for this slowdown, other than the fact that I couldn’t be bothered to sell puts this year.

In hindsight I should probably do it more, since I can earn a fairly steady and “safe” income like that… If i had done it every month with a couple of stocks I could probably have turned this capital loss into a gain.

Benchmarking

The real question of whether I am having alpha is when you compare the portfolio value versus the hypothetical benchmark portfolio.

My benchmark portfolio is a simple buy and hold VWCE with a 3€ transaction cost. In essence it’s what I would have done if i had zero active management, and purely bought the index whenever I put in cash into the brokerage account.

In short I underperformed.

Not by much (when you don’t account for the tax drag) but underperformance all the same.

Most of this underperformance is directly attributed purely to INTC 0.00%↑ which is unfortunate.

If you want to see the VAMe and risk analysis from the brokerage:

And that’s it in terms of key information!

My Goals

Looking back at 2024 I had 3 goals:

• 2500€ of dividends received

• At least 60% of portfolio value should be in Indexes

• Continue the newsletter

All of which I achieved, although the newsletter could have done with extra work.

Unfortunately I’ve been quite busy and that is looking to continue to be the case in 2025.

For 2025 I would like to have the following:

• 3000€ in dividends received

• Reverse the underperformance vs my benchmark

• Reduce the number of positions in the portfolio

Anything else is completely out of my mind at the moment, since my personal life is going through some pretty massive changes (I got engaged!) and that will only accelerate in 2025.

Conclusion

I sleep well at night.

Ultimately the portfolio is on track, I’m comfortable with it and that’s really all the matters!

Hopefully I will have passed CFA level 2!

See you on the next one!