Year 2016 in review

What a year this has been once again, what a year! A lot has happened in world politics and my personal life. At the same time the markets have gained some more and been, in my opinion, overall less dramatic than I would have expected.

Savings

This chart shows my 2016 portfolio value changes. That bump on the last day is a contribution of 2 500 euros to my savings account I made on the last day of the year. This money is going to be put to work in a more efficient manner once I decide the place.

Portfolio valuation and savings. The blue line is the value of my portfolio and the red line is cost of the portfolio.

Let's look at the numbers for my portfolio cost and value in more detail in a table:

	31.12.2015	30.12.2016	change
cost (= savings)	50 458 euro	66 585 euro	+16 127 euro
value	63 820 euro	89 189 euro	+25 369 euro

Woot? So, during 2016 I managed to save an astonishing 16 127 euros (2015 was 12 167 euros). I am really happy with that number. That's about 1 344 euros (1014) per month.

During the year, my net income was about 37 600 euros so my savings rate was a very nice 43% (last year was only 33%). Where exactly the extra savings came from I'm not really sure, probably less upkeep on the apartment, but I didn't really skimp on anything, just lived life as before.

Growth

But I'm even more happy with the next number, the value of my portfolio is up 25 369 euros during the year. That means that the market produced about 9 242 euros or about +12% in gains for me. This is super sweet and the biggest gain in terms of euros I've ever made!



The below chart shows the TWR return calculation (in green, left scale) and the EUR/USD (in burgundy, right scale) currency rate. The TWR was down more than 10% in February but crossed over to the positive side during the summer and made most of it's gains in the last two months (thanks Mr Trump, I guess...). My portfolio is quite heavily weighted towards dollar nominated stuff so there's a definite correlation with the EUR/USD exchange rate as seen below.

TWR return calculation (in green, left scale) and the EUR/USD (in burgundy, right scale) currency rate.

Mortgage and net worth

During 2016 I also paid off 4815 euros of my mortgage. There's still plenty left. As the euribor rates are super low at the moment, I don't see any reason to contribute more than minimum to mortgage for the time being.


I can't tell yet if this will be considered an investment or not but if were an investment, my total contributions to my net worth would be 20 942 euros or about 56% (2015 was 46%) of my net income.

My net worth was up during the year about 27 500 euros to roughly 108 500 euros but I don't really track my net worth. I'm mostly interested in my money generating portfolio.

Conclusion

In last year's review, I went on to ponder whether we were headed off a cliff, and in February it certainly looked like that until it all turned around. I'm still inclined to think that the future is uncertain: stocks are the only game in town as interest are so low and market valuations are very high. The probability of good returns in future is diminishing as the current bull marches on. So what will I do? Keep adding to my portfolio with dollar cost averaging, just like until now. Godspeed for 2017!