November 30, 2022
I took a break from writing for a couple of months as I have been very quiet on the trading front. Thank you to all of you who have asked when the next post was coming- it’s nice to hear that you care to read them 🙂.
As I prepare my 2023 investment plan, I thought I’d share a review of The 2022 Game Plan plus some additional reflections from this year. The 2022 Game Plan is a post I wrote on January 1st outlining some of my plans for investing in 2022. I would suggest reading over again to ensure the following review makes more sense. Each of the first six points lines up with each point from The 2022 Game Plan post.
1. Plan: Use a macro analysis to set ‘buy range’ targets. Result: 11% of trading days in 2022 have fallen within the trading range: With 230 trading days so far this year, 25 days have fallen within the Dow trading range that I had set at the start of the year. This allowed me to fill a portion of the positions that I would like to have.
To note, I'm not trying to time the market, I'm just trying to buy when I believe that company valuations are more realistic. I’m currently waiting to continue buying when either the market hits a new low or when interest rates start going down (more on this to come in next month’s post).
2. Plan: Skew toward more cash, less equities. Result: In hindsight, favouring cash at the start of the year was a good decision. It allowed me to buy some stocks when they were lower and add GIC’s to my portfolio.
With the S&P down 14% for the year at the moment of writing, getting a guaranteed 5% risk-free return seems like a great opportunity. This year I learned that it is worth shopping around for GIC’s and that banks won’t give you the best rates unless you apply a bit of pressure (or threaten to take your business somewhere else 😅).
3. Plan: Review my portfolio and sell stocks I no longer had the same conviction for. Result: The 4 stocks I sold in December have had mixed results. PPL has increased its value by 28% (!). I sold PPL as I didn't want to own any oil stocks. It was a principle based decision that I don't regret but not necessarily the best financial move, especially in a year of rising gas prices. Assuming I had $1,000 in each of the stocks on December 31st for a total of $4,000, had I kept them, I would have today $3,211, a combined decline of 20%
4. Plan: Find a few stocks I was interested in buying if market conditions enter the ‘range’ i set in #1 above. Result: The stock portfolio I bought this year as per the 2022 Game Plan has returned 9.5% to date. There is a wide range of performance amongst the individual stocks. The lowest at -30% for META, and the highest at +69% for NFLX. It reinforces the importance of having a diversified portfolio vs betting on just one stock or sector.
5. Plan: Diversify from individual stocks by also buying some index ETFs. Result: Although I wouldn't draw any conclusion from it as it's only been 5 months, the combined list of individual stocks have performed better than the index ETF’s (all stocks and ETF's were acquired on the same day).
6. Plan: Continue to hold some ETFs focused on areas I want to learn more about, but don’t know well enough to pick individual stocks. Result: The “learning” ETF’s I acquired have returned a combined 4.7%. Not a bad return, and significantly better than if I had just picked for example BTC (for Blockchain) or TSLA (for Electric Vehicles).
Yes, the Stock Talk Game Plan did well for this year and I’m happy with the performance and learnings. Time to start planning for what is to come in 2023.
Claudia Soler
* Disclaimer: The information contained within this blog is for informational purposes only and it is not intended as a recommendation of the securities highlighted or any particular investment strategy; nor should it be considered a solicitation to buy or sell any security. In addition, this information is not represented or warranted to be accurate, correct, complete or timely. the securities mentioned in this blog may not be suitable for all types of investors and the information contained in this blog does not constitute advice. Before acting on any information in this blog, readers should consider whether such an investment is suitable for their particular circumstances, perform their own due diligence, and if necessary, seek professional advice.