Strategy: αc Compound Portfolio IV

Investment Objective

Aggressive Long-Term Capital Appreciation

Annualized Return

33.7%

Time
Horizon

5+ years

Rebalancing Frequency

N/A

A buy-and-hold portfolio consisting of a number of stable companies with high long-term growth.

About

The portfolio pursues a strategy that seeks to achieve equity-like returns with lower volatility and drawdowns compared to traditional equity through active ETF selection, risk management and diversification. It is thus expected to produce higher risk-adjusted returns than market indexes.

Performance

Portfolio + Compare with Initial Balance Final Balance Annual Return Annual Volatility Best Year Worst Year Max Drawdown Sharpe Ratio Sortino Ratio
$10,000 $7,789,205 33.7% 23.9% 111.9% -28.6% -44.1% 1.34 2.01
$10,000 $56,283 7.8% 20% 32.3% -36.8% -55.2% 0.48 0.68

  • Initial balance: The amount of starting capital used to invest in the asset or portfolio. In this case, we're starting with a $10,000 investment on December 1997.
  • Final balance: The amount of capital we've accrued over time as of December 2020.
  • Annual return: Also known as annualized return, or CAGR (Compound Annual Growth Rate), measures how much an investment has increased on average each year, during a specific time period. The time period in this case is approximately 23 year(s). Even a small difference in return can have a big impact on the final balance over a long period of time.
  • Annual volatility: Basically indicates how much, in percentage points, the investment can deviate from its annual return, under most circumstances. An investment with an annual return of 5% and an annual volatility of 10% would indicate returns from approximately -5% to 15% most of the time. A lower volatility is usually preferred to ensure more steady returns over time.
  • Best year: The best performance attained over its lifetime in a given year.
  • Worst year: The worst performance undergone over its lifetime in a given year.
  • Max drawdown: The largest percentage drop from a peak to a trough of an asset or portfolio, before a new peak is attained. Maximum drawdown is an indicator of downside risk over a specified time period.
  • Sharpe Ratio: The Sharpe ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk. A Sharpe Ratio above 1 is considered good.
  • Sortino Ratio: The Sortino Ratio is a variation of the Sharpe ratio that only penalizes the investment for negative volatility/outcomes, and not for positive volatility. A Sortino Ratio above 1 is considered good.

Drawdown Periods

Simply said, a drawdown is the "pain" period experienced by an investor between a peak (new highs) and subsequent valley (a low point before moving higher). In the table below are the fifth largest drawdowns encountered for the portfolios/assets in question.

αc Compound Portfolio IV

Drawdown Peak date Valley date Recovery date Duration
-44.06% 2007-10-31 2009-03-09 2010-01-13 576 days
-31.84% 1998-07-20 1998-10-08 1998-11-23 91 days
-31.16% 2000-03-28 2000-12-20 2001-12-06 443 days
-26.67% 2018-09-13 2018-12-24 2019-05-03 167 days
-24.93% 2020-02-19 2020-03-16 2020-04-24 48 days

The αc Compound Portfolio IV took approximately 9 months on average to recover from a major drawdown.

S&P 500 (US Large Cap)

Drawdown Peak date Valley date Recovery date Duration
-55.19% 2007-10-09 2009-03-09 2012-08-16 1268 days
-47.52% 2000-03-24 2002-10-09 2006-10-26 1720 days
-34.1% 2020-02-19 2020-03-23 2020-08-18 130 days
-19.35% 2018-09-20 2018-12-24 2019-04-12 147 days
-19.03% 1998-07-20 1998-08-31 1998-11-23 91 days

The S&P 500 (US Large Cap) took approximately 22 months on average to recover from a major drawdown.

Underwater plot

The underwater plot shows you the drawdown periods on a chart. Whereas the performance chart usually gives you a positive viewpoint, the underwater plot gives you a pessimistic viewpoint. It helps you to visualize downtrends that occurred and how long it took for the portfolio's value to rebound to hit a new high after suffering a loss.

Annual Returns

Monthly Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1997 - - - - - - - - - - - 0
1998 1.4% 22% -1.4% 8.5% -2.9% 18.6% -1.8% -22% 18% 3.1% 13.3% 31.7%
1999 25.4% -3.4% -3.9% 9.1% -6.4% 6.7% 1.9% -6.6% 0.3% 6.1% 15.8% 7.1%
2000 -4.5% 26.4% 0.2% -5.3% -10.7% -4.1% -2% 12.1% -5.3% -8.5% -5.2% 5.3%
2001 4.2% -3.1% 1.6% 4.9% 5.7% 0.7% -3.1% 0.5% -6.2% 9% 10.9% 10.4%
2002 3.7% 2.6% 4.3% 0.2% 0 -4.3% -10.8% 2.5% -3% 4.9% 4.5% 7.6%
2003 0.2% -4% -0.4% 12.6% 11% 0.6% 9.5% 6.6% 7.1% 16% 2.6% 2.9%
2004 6.9% 2.3% 1.1% -1.4% 3.2% 5.5% -9.8% 0.8% 3.8% 8.5% 8% 3.3%
2005 -2% -0.3% -3.8% -4.8% 5.9% 4.7% 8% 3.8% 6.1% 0.5% 10.7% -2.9%
2006 2% 2.7% 5.3% -0.3% -4.2% 0.6% 3.8% 3.5% 4.3% 8.4% 2.9% 6.1%
2007 0.7% -2.1% 5.8% 12.4% 7.9% -4% 0.9% 11% 5.1% 6.4% -9.8% -0.3%
2008 -5.3% -4.6% 2.8% 4.8% 2% -7.6% 8.2% 3.6% -6.8% -16.6% -10.9% 0.4%
2009 -3.3% -3.5% 5.4% 15.9% 1.4% 7.4% 7.3% 5.5% 0.8% 1.2% 2.7% 4.1%
2010 -2.6% 1.8% 8.8% 8.1% -3.1% -0.9% 1.1% -4.2% 9.4% 5.1% 3.6% 4.8%
2011 1.9% 3.8% 1.7% 5.6% -0.4% 0.2% 1.4% -2.7% -3.3% 9.7% 0.7% -1.9%
2012 6.2% 5.4% 7.8% 1.1% -2.9% 5.6% -2.3% 4.6% 6.5% -2.1% 0.7% 1.5%
2013 4.9% 0.6% 3.4% -0.6% 3.2% 1.3% 7.6% 0.9% 8.6% 4.6% 3.7% 2.6%
2014 -3.5% 2% 0.8% -3.5% -0.5% 2% -1.2% 4.1% -0.9% 8.8% 3.1% 1.7%
2015 -0.1% 4.8% 0.8% -4.5% 1.1% 1.8% 4.1% -2.9% 4.1% 7.9% 4.4% -1.2%
2016 -5.6% -3.4% 6.7% -0.2% 5% 3.1% 4.8% 2.8% -0.1% -2.3% 5.7% 0.5%
2017 0.4% 5.3% 4.8% 3.6% 2.8% -0.9% 5.1% 0.7% 5.9% 5.3% 1.3% 1.6%
2018 6.7% -0.8% 3.6% 5.1% 9.1% 5.3% 0.4% 10.8% -3.9% -7.8% -2.6% -8.4%
2019 6.6% 7.5% 3% 6.6% -2.4% 8.9% 7.8% 2.2% -2% 1.7% 2.6% 2.5%
2020 5.4% -4.2% -0.4% 17.8% 16.6% 8.8% 19.6% -5.1% 3.6% 4.4% -4.1% 0
Pos 65.2% 56.5% 78.3% 65.2% 59.1% 73.9% 69.6% 73.9% 60.9% 78.3% 78.3% 77.3%
Avg 2.2% 2.5% 2.5% 4.2% 1.9% 2.6% 2.6% 1.4% 2.3% 3.2% 2.8% 3.6%