Assessment Time

At the beginning of each year I take a look at the previous year-end financial statements and review my portfolio.  I use a spreadsheet that tracks the performance of my savings and investments and this assists me in deciding whether to make changes in the coming year.

First of all I note that I have excess money in my savings and trading accounts that needs to be invested.  In the next several days (or weeks) I’ll do some research to decide what stock(s) I can purchase.

I also have a high interest savings account that I call my “accrual” account.  This is where I make regular deposits to cover my annual insurance premiums, Christmas and other gifts, vacation and other special purchases.  Since I recently bought a new car, this account balance has been reduced a fair bit and will need to be replenished to cover some other purchases I have in mind.

I have a couple of mutual funds with low balances that I should finally get rid of.  Their balances have barely changed in the last few years and I have kept them way too long.  I need to stop procrastinating and transfer the funds into a more productive investment.

Related: How To Use A Stock Screener To Find The Best Stocks

I’m happy to note that all but two of my stocks have increased over last year’s balances.  I generally focus more on the dividend income, but it’s gratifying to see an increase in value as well.  Some examples of my holdings (in no particular order) are as follows:

Stock Shares Avg Cost Dec 2009 Bal. Dec 2010 Bal.
TD* 1510 $15.82 $99,570 $121,892
RCI.B 200 $11.26 $6,512 $6,902
EMA 100 $20.90 $2,506 $3,133
TRP 100 $20.72 $3,615 $3,799
FTS 100 $24.99 $2,866 $3,391
RET 100 $13.53 $1,533 $1,775
SAP 100 $25.80 $3,075 $3,946
REI.UN 100 $16.12 $1,984 $2,195
COS.UN 100 $17.93 $2,974 $2,644
POW 100 $29.74 $2,912 $2,761

*Note:  As part of an employee savings plan, my TD shares had no actual cost to me apart from being a taxable benefit.  I realize I’m quite over-weighted, but to me this replaces the pension plan I won’t receive.

Since my dividend returns are substantially higher than anything I would receive from GIC’s or bonds I don’t bother tracking the annual yields and I’m happy to report that my dividend amounts have increased by a whopping 25.5% over last year, and my yield on cost is up substantially.

For my house value I use the annual tax assessment I get from the city.  It may not be entirely accurate but it suits my purpose since I’m not inclined to get a property appraisal every year.  The tax department claims that my residence has increased in value by $17,000.

My credit card always has a balance when I do this exercise from holiday spending, but I always pay off my credit card balance in full when my statement arrives so it doesn’t accrue any interest.  On the other hand, my line of credit has reduced quite a bit and I expect it to be completely paid off within the next year.

Overall, I’m pleased with the results.  My net worth has increased over $50,000 even with some large purchases and my debt/equity ratio is less than 5%.  With a bit of tweaking, the implementation of a new personal budget, and a plan for investing both my dividends and new deposits (together with a good economy), I would like to anticipate a very profitable new year.

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  1. Balance Junkie on January 11, 2011 at 9:01 am

    Thanks for sharing your assessment. It’s great to see some examples on how to go about doing this type of yearly exercise. 🙂

    • Boomer on January 11, 2011 at 9:05 am

      Thanks Junkie. I’d be interested in how others do their periodic reviews and how often. I only assess once a year.

      • Balance Junkie on January 11, 2011 at 12:08 pm

        I do an overall review every year, usually about this time, but I also review throughout the year. I try to do it quarterly, but usually I just end up looking at it when something significant happens – like an investment transaction, a mortgage prepayment, or a major purchase.

  2. The Passive Income Earner on January 11, 2011 at 12:07 pm

    Well done! I have a monthly net worth but my investment are regularly reviewed based on my research. I have little money invested and many good companies. When opportunity arise, I make take some profits (partially or in full) to fund new opportunities.

  3. Boomer on January 12, 2011 at 10:27 am

    @passive income earner: Many times I’ve thought of taking profits but then I’m stuck as to a suitable replacement. I don’t want to sit on the cash and lose my dividends while I’m waiting for a good opportunity so I just leave things as they are.

  4. BeatingTheIndex on January 13, 2011 at 4:16 pm

    I follow up on my networth on a monthly basis but do have the big EOY assessment. If we don’t get any black swans during the year, 2011 will most probably turn out profitable for many people!

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