I’m going to ask your indulgence and post my 2013 performance review. This is a cross post from the Stock Advisor Options board:
2013 was probably a year for the record books as far as the stock market was concerned. I like to review my performance at the end of the year and compare it to the S&P to make sure that the effort I put into it is worth the time. It certainly was this year, and has been over the last 3 years and five years. I’m showing my annualized returns as reported by Vanguard, although this year I have been independently calculating the returns to make sure Vanguard is doing it correctly. On my Advantage account I came up with an xirr of 64.5%, a little higher than Vanguard’s, but close enough to give me confidence in Vanguard’s numbers.
The Advantage account is my non-retirement account and is the most complicated to calculate since it includes a brokerage account as well as the money market account where I deposit my salary and pay my bills from. It is also where I do my naked put writing. I have shown the relative size of the accounts in the %AUM column (Assets Under Management).
What is especially gratifying is that I started the year with 31% of my Advantage account in AAPL stock and ended it with 30.2% in AAPL stock and DITM options, so my performance was excellent despite AAPL only gaining 5.4% for the year. I was also heavily weighted in AAPL in my Retirement brokerage and Fiona’s account. I think my performance figures show the benefit of using naked put selling to spice your returns, certainly in a strong market like 2013, but even over the last five years. I also started 2013 with 12.6% of my Advantage account in NFLX.
To illustrate the importance of returns like these, I have been able to make net withdrawals of 20% of the starting value of my Advantage account to pay for such things as college tuition for my daughter, but still ended with the account 39% higher than the beginning of the year.
As of 12/31/2013 5 Year 3 Year 1 Year %AUM All Accounts 29.9% 17.4% 49.2% 100% Advantage 41.6% 22.7% 62.7% 24% Retirement 24.4% 15.1% 44.4% 69% -- Funds 18.6% 17.9% 37.5% 10% -- Brokerage 25.8% 14.7% 45.6% 59% Fiona 32.3% 20.7% 41.4% 7% S&P (500 Index Adm) 17.9% 13.7% 32.3%
I’ll try to follow up with a review of my options trades, although that has all been reported in real time and is accessible in my spreadsheet: