This is the third article examining the 100+ investments that I can track in detail*. Four significant investments made annualised returns of -10% per year or more, between 1/7/12 to 1/7/15, with a fifth chunky investment proving nearly as bad. In this post I’m going to examine these, my worst investments in this sample, in detail. (Other posts have examined the best six investments and the average performance).
Analysing investments is a study in risk. Given that the investment portfolio here, which averaged around 10% per year, had 100 investments in it, you would expect a few investments to deliver negative returns. So the key questions here are:
- Was my original logic sound? It is possible that these investments might actually be ‘good’, but I am showing a loss in the 2012-2015 window – i.e. temporarily under water, but fundamentally sensible holdings.
- Were these investments avoidable? Even if the original logic was sound, perhaps there were warning signs I could have heeded?
- Did I trade in/out of these investments at the right time?
Let’s look at these five investments in no particular order.
Continue reading “Anatomy of a portfolio’s terrible returns”
