Sunday, August 31, 2014

2014 Performance Update

It has been a while since I have done a blog post but I figured I would provide an update on the year.  This year was the first year I have really been able to do some consistent trading.  In recent years, I may trade for a while then stop due to frustration or due to work and CFA studying so I never really got a true sense of results over an extended period of time.

Through the close of trading on 8/29/2014 I am +8.99% for the year AFTER commissions.  Before commissions I am actually +15.02%.  The fact that 40% of my profits have been eaten by commissions is fairly ridiculous so I may look into other broker options.  Believe it or not, I actually had Thinkorswim lower my commissions about 4 months into the year too!

The S&P 500 is up 9.89% over the same period YTD.  By comparison it makes my results look modest at best however, the real benchmark to use should be the Russell 2000.  The Russell 2000 has actually lagged the broader market and is up only 1.75% YTD.  The reason I use the Russell as my benchmark is due to the fact that a majority of my trading has centered around positions on the Russell 2000 index.  One thing I need to determine is a way to get my volatility of returns and compared it to the index volatility.  This will be useful because it will allow me to measure my risk-adjusted returns and see if I am truly providing better returns and low correlation.  I am fairly confident that I do not have 5x the vol while achieving 5x the return of the Russell but I would like to prove it empirically.

So far the year has not been without its obstacles and draw downs but I have remained disciplined and committed to my goal of examining my results after a complete year of trading.  As long as I have the ability, I plan to continue to manage my portfolio for the remainder of the year.  Obviously I would love to keep up my current pace of returns for remaining four months of the year but we will see.  If I can achieve 10% returns after commissions and significantly outperform the Russell 2000(both returns and volatility) I will be happy.

Stay tuned...

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