Our investment club has been in the market now for just about a month and has thus far done fairly well. The portfolio consisted of 10 long positions and 10 short positions. That mix has now been slightly changed to 11 long positions and 10 short positions, however, exposure on both sides remains equal.
Since the last update, SGIC spent some time hovering around the break-even mark before reaching a high of slightly over 13% up. Ok, I make is sound dramatic... it took a few days to get going and at one stage traded well above 13% in profit, but that lasted only a few hours and it ended that particular day 11.62% up overall.
The market then had a period of trading lower and lower and naturally, SGIC took a bit of a hit, although it remained in positive territory the whole time. The portfolio within SGIC is exaggerating the moves of the Top 40 (due to the gearing), however it is not participating in the downside as much as what it does when the market rallies. In simple terms; without any gearing when the market falls, SGIC wouldn't fall as hard; and when the market rallies, SGIC would rally harder than the market. Also, the volatility of the portfolio would be less than that of the Top 40 index.
We have added some gearing to the mix though and what we have now, is a portfolio that looks set to outperform the market very well over the longer term. Here is a performance chart comparing SGIC to the Top 40 Index as at the close of the market yesterday.
 |
| SGIC vs Top 40 |
Oh, I maybe should have mentioned that SGIC was up with 4.78% at the close yesterday (indicated on the chart actually, but it might be a little confusing). Currently just over 5% up.
ReplyDeleteClub meetings may be educational and each member may actively participate in investment decisions.
ReplyDeleteClick here for more details.