Oct 16, 2016

Cory Diary : Astronomical Returns

I have been seeing astronomical returns from some forum recently. It easily get people attention. That's what it does. But what's matter at the end of the day is how much you truly made at specific time frame. Why I say that is because market goes up and down. And relative performance measures need to account for time frame with reasonable period length to allow for stability.


STI Index


STI with Dividends from 2009-2016 = 9% annual returns after cost.

Let's take a peak of some period after global financial crisis (GFC) based on STI. Since is reasonable not to choose the bottom. At a height of STI 1900 on May 2009 will be something i am comfortable with. The current STI Index is at 2800. The XIRR ( Annualised returns ) excluding dividends are 5.3%. If we are to include dividends that will be like 8~9%. That's like 7 years after GFC.

Percentage can be quite misleading as it is open to abuse with time, value weight-age and cost structure. There is also price spread which can cause a large dent and trustworthiness. So to ball park a figure, if we are to put $100,000 into a fund 7 years ago just using 5.3% annual return figure, your value should be around $147,000 excluding "dividends", and we are taking the lowered STI price of today. Meaning 47% profit is the Minimum Expectation.

Hello ! you have to have 47% profit at that specific time frame because that is what all investors should have as a baseline. And I have even excludes dividends. So are you getting this amount in total else is time you question your judgement.


Cory
20161016

2 comments:

  1. Hi Cory,
    Yes! One need to be realistic on the expectation of returns,,,ummm,, 20 % per month or 40% p.a ,,, for how long it can achieve?
    Cheers !

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    Replies
    1. I will be happy with 15% Long Term. :)

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