- Stocks had a strong Q4, and one of their best years in recent history with the S&P 500 gaining around 30% in 2019.
- Our stock and ETF sector also had a record run, delivering roughly 24% in Q4, 29% once dividends and covered call premiums were factored in.
- Our gold/silver/miners (GSM) sector also performed quite well in the quarter as well as throughout 2019.
- However, there were some weak links in Q4 (bond instruments and cryptocurrencies).
- Here is how our diversified portfolio beat the market in 2019, and what to look at going into 2020.
- This idea was discussed in more depth with members of my private investing community, Albright Investment Group . Get started today »
A Year in Review and What Could Outperform in 2020
Albright Investment Group, AIG, closed out the year with another strong quarter. By far the best-performing segment in Q4 was the stock and equity ETF portion of our portfolio. This segment returned roughly 29% in Q4 alone once dividends and covered call premiums were factored in. Even without dividends and covered call options strategy, our equity segment of the portfolio returned 24% in Q4, more than tripling the S&P 500/SPX's (SP500) return of roughly 7% for the quarter.
Source: Author's Material (certain "current positions" include inter-quarter adds and sales not specified in the underlying spreadsheet).
For the full year, AIG's stock and ETF segment of the portfolio (excluding GSMs, bond instruments in Q4) gained about 66% (relative to 30% for H1 and 37% through Q3), more than doubling the S&P 500's return of roughly 30% in 2019. If we include reinvested dividends throughout 2019, the SPX returned about 33%, one of its best years in recent history. Still, our stock and equity ETF portion of the portfolio beat these returns by roughly 100%.
I don't expect to see the SPX appreciate by another 30% this year, but with the right portfolio allocation, 2020 is likely to be another strong year. Some sectors that we think can outperform this year include: GSMs, select healthcare, technology, energy/oil services, materials, defense, and financial names. Bond instruments that appreciate as key treasury rates decline should perform well, especially if the Fed returns to its easy monetary stance. Furthermore, Bitcoin and certain other popular digital assets could have a strong up move in 2020.
AIG's 2019 Q4 and Full-Year Portfolio Highlights
Some of our best performers in Q4 included stocks that are allocated in the technology section of our portfolio and included: Tesla (TSLA), up by 75% for the quarter; Alibaba (BABA), up by 29.5%; Baidu (BIDU), up by 24.25%; Axon (AAXN), up by 40%; Nvidia (NVDA), up by 37%; and Netflix (NFLX), up by 23%.
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