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Warren Investments – I Have Consistently Beaten the Market

My investment year begins on July 1st.  So now I am in a poition to review my investments of the last year.


First things first: at the start of July 2016 I had £20,000 in my pension.  On 1st July this year, I had £23,977.86.  For the purposes of easy analysis I will round that up by £2.14 to £24,000.  That’s a neat year increase of 20%.


What Happened When I Didn’t Manage My Investments?


Over the previous year (July 2015-16), I barely touched my investments.  This was because I spent the year concentrating on building my website.  During that year my pension value remained at a constant level – i.e. 0% return.


In one sense this is logical, since I barely touched my investments that year.  (I think I bought shares in Caffyns and did nothing else).  But recently I began to compare my returns to the market as a whole.  This enables me to compare my results to those of the wider market.  This comparison was interesting.


From July 2015 to July 2016, the FTSE All-Share Index moved from 3571 points, to 3515.  That’s a growth of -1.6%.  So, when compared to the FTSE All-Share Index that year, my unmanaged portfolio did fine (it beat the FTSE All-Share).  This is good news.


I Beat the Market by 30%


During July 2014-15 I actively managed my pension for the first time.  Over this period, my pension increased from £15,000 to £20,000.  This was a 33% increase.  However, for all but 2 months of that year, I actually only invested around £12,000 of my pension pot.  The increase was therefore greater than 33%.


Virtual Portfolio: Remarkable 70% Return!


Prior to beginning my active investing, I made a ‘virtual’ (or imaginary) investment.  This was an experiment.  I was trying to apply O’Shaunessy’s investment principles (as outlined in his seminal work What Works on Wall Street).  I explain this process in full in my article How to Make a Million Pounds.  Between 21st June 2012 and 13th Feb 2014, my virtual investment grew 70% (more than this if you include dividends).


2012-2017: I Have Consistently Beaten the Market


I will now list all of these returns alongside those of the FTSE All-Share Index (a composite of 600 companies listed on the London Stock exchange).


Jun 2012 – Feb 2014          My return: 70%                                 FTSE All-Share: 26%


Jul 2014  – Jul 2015           My return: 33%                                 FTSE All-Share: -1.6%


Jul 2015 – Jul 2016            My return: 0%                                   FTSE All-Share: -1.6%


Jul 2016 – Jul 2017            My return: 20%                                 FTSE All-Share: 13.9%


So there you go.  I’ve consistently beaten the market over 4 years.  In two of these years I have actively managed my portfolio.  In a future article I will do a more in-depth analysis of my investments over the past year.

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