2013 saw a positive index performance with the index starting at 4742 and closing at 5353. The year low was on June 25 at 4610 and the high in October at 5410. Despite the good index performance my investment return from my trading account was minimal : just above 2%
In 2013, the ASX200 index climbed 15.37%, beating the 14.6% gains of 2012 and it was the best year since the market was up 30.9% rally in 2009, which came after the GFC crash of 2008 that decimated the index down 41.3%. The gains were fuelled by the combination of an improving global growth outlook, supported by easy global monetary policy, and record-low domestic interest rates saw money switch from safe haven investments like bank deposits and bonds into shares.
The big four banks help the index lift the most in 2013, as a lower interest rate market spurred a recovery in the housing market that helped the major lenders to grow their mortgage books and profit. Commonwealth Bank rose 25.1% to $77.80, while Westpac climbed 24.1% to $32.38, and ANZ gained 28.5% to $32.23. National Australia Bank, the only one of the big four not to hit a record high in the second half of 2013, added 39.4% to $34.83. Among other industrial blue chip stocks, Telstra Corporation rose 20.1 per cent to $5.25, while Woolworths gained 15.4 per cent to $33.85 and Wesfarmers, owner of Coles, added 19.5 per cent to $44.04.
This was the reason for my poor returns:
I had a large number of shares in this company that I sold in December as a stop loss was hit due to a second profit warning. The loss on Crowe Horwath off set the gains I made from trades in FMG and BOQ.
BHP Billiton finished the year up only 2.5%t at $37.99, while Rio Tinto ended 3.3% higher at $68.18 as new chief executives at the country’s two biggest miners implemented cost cutting strategies. The third largest iron ore producer, Fortescue, finished the year 25.2% ahead at $5.82, having impressed analysts with its accelerated debt repayments.
Calendar year 2013 was not a success story for my investing. While I didn't lose over all I certainly lost an opportunity for strong returns. The year was full of companies issuing profit warnings and there were many companies that performed poorly. The general strength of the market was in banks with weakness in service industries especially mining related.
I start 2014 with optimism.