Performance 2016

There performance in CHF from portfolio in 2016, amounts to 11.8%. Cumulatively, this brings us to an annual profitability since launch (03.02.2010) of +12.95%. The portfolio is doing slightly less well than the market (S&P 15.07% in CHF) during this year, but with almost 2x lower volatility.

This year has been marked by a market that has broken new records, helped in particular by the election of Trump, with his planned policy of economic recovery. Market players have thus regained a taste for risk, even though stock valuations were already very high.

In this context, it is difficult to compete with the market with a portfolio that plays it safe. Indeed, the portfolio's values are selected for their low beta, i.e. they are not very sensitive to market variations, thanks to their activity in non-cyclical sectors, such as health, food, consumer goods or tobacco.

On the other hand, the establishment of the Trading Auto Signal at the end of last year, aimed to take advantage of and protect against trendless or bearish markets. By playing in both directions (buy-sell) when stocks are breaking record after record, it is not easy to do better than the benchmark index.

That being said, I prefer to lose a few percentage points in a bull market and have peace of mind for the future. Playing the game of who will buy the highest is no longer my habit since the bursting of the Internet bubble.

The portfolio's dividend growth remains high, at 10,23% per year. Thanks to this, the portfolio's yield on purchase cost has risen to 3,81%, even though the current yield is only 2,23%. It should also be noted that the Trading Auto Signal has reduced, temporarily at least, the yield on purchase cost. Indeed, the capital invested in it only generates dividends when the position is bullish. The dividend yield of the SPY is also relatively low compared to the other securities in the portfolio. On the other hand, thanks to the strong growth expected with this signal, it should quickly allow a significant increase in the yield on purchase cost.

THE distribution ratio The average portfolio ratio remains at quite interesting levels, with 59,65%. The measures taken this year, by selling certain black sheep, have made it possible to significantly reduce this ratio which had progressed significantly in recent times (it was close to 100% in the first half, in particular because of certain companies active in the energy sector).

During the year, CHF 6,781 in net dividends were generated, compared to CHF 5,713 the previous year. I am thus progressing ever more towards financial independence, today being 19% away from the objective that will allow me to completely retire from the professional world.

My progress was slow in the early years, but I have been growing exponentially lately. I am now waiting for a market correction that will allow me to invest heavily in new good dividend-paying stocks. If that time comes soon enough, perhaps I will be able to reach my ambitious goal in due time.

I would like to take this opportunity to thank you for your loyalty and to wish you a 2017 filled with stock market, family and, incidentally, professional satisfaction.