Review 2012: It's the way that counts

2012 was the first full year I invested according to the Fund Samurai strategy outlined in my investment plan. I am pretty pleased with the results. Here are the main points that describe the year:

  • 6 months out of the market
  • 7% return
  • 4% max draw down

Compare this to the benchmark AEX:
  • 7,5% return
  • 15+% max draw down
Equity curve Fund Samurai strategy and AEX 2012
So I would have made about the same result if I would had just bought and hold the AEX index. The reason why I am pleased with the result is the way I got the result as compared to how the AEX behaved. My equity curve was much smoother and only had a draw down of 4%, while not ever going into negative numbers. Unfortunately I had to take my money out of the market in June, when the Benchmark was just starting to climb. I glanced over the positions I sold in June and compared them with the prices in November. Would I have stayed in in June my equity curve would have followed the AEX's summer up trend. This would have made my yearly return target of 20% not unlikely.

So I have a sense that the investment rules I have set have a good defensive character while allowing to partially profit from up trends. The problem I have is that I cannot get it all quantified the way I want.

And this will be one of my main goals for 2013:

Quantify, quantify, quantify!

My broker provides the tools to make buy and sell decisions according to the investment rules I have set. They also provide the equity curve charts and other monitoring tools. So far I have been unable to find raw (historical) price data of the funds I am trading. And although my broker is a trustworthy company, I do not like this.

So the plan for 2013 is to:

  • Switch the strategy over to ETFs
  • Get price data of these ETFs from Yahoo finance and Google finance
  • Back test and optimize the strategy
  • Automate the analyzes and generation of buy and sell signals, as well as portfolio monitoring
  • Trade these ETFs with any broker of choice (my current broker will do)

Why go through all this trouble?:
  • ETFs are cheaper / lower cost
  • ETFs are more transparently priced and traded
This will ultimately allow for more control over the portfolio and most importantly the risk in the portfolio.