The year 2019 was a rollercoaster ride for our real money account, which, in the end, produced a solid result. We missed our target of 30% and have to settle for a performance of 12.2%. But when you consider that 2019 was the year when so many hedge funds went bankrupt or had to give up their business, we can be proud of ourselves.
12.2% is very good compared to the long-term performance of stock indices, but far from our target of 30%. Looking at the path the account has followed this year and how badly some strategies performed, we just have to be humble and frugal.
We started the year in our real money account with an account balance of $108,759.65 and stood at $122,027.28 on December 30, 2019, which corresponds to a percentage increase of 12.2%—quite passable in a difficult year for us.
As you can see, things went sensationally in March. This was due to several happy circumstances and is basically down to just one week. In this article, you can learn more about it.
Performance of individual investment instruments
Let’s look at the realized and unrealized results of the individual investment instruments below:
- Realized earnings in shares – $3,406.45
- Unreleased earnings in stocks – $2,079.79
- Realized result in futures – $16,795.35
- Unrealized earnings in futures – $3,476.00
- Realized result in options – $13,908.60
- Unrealized earnings in options – $1,646.15
- Realized result in forex – $82.46
- Unrealized result in forex – $34.15
All realized trades result in a profit of $18,943.95, and the unrealized profits amount to $3,745.08.
These numbers look very good, especially given that our butterfly strategies on the Russell 2000 (RUT) have lost about $12,000.00 this year.
Added to this is the dividend income on our equity positions of $615.96.
Performance in comparison
12.2% is not an excellent result in 2019 compared to the common indices. However, one should not forget at this point that the stock indices performed far better than their long-term average of 7%.
The S&P 500 (green) makes over 30% in just one calendar year. This happens extremely rarely. We have to admit that we couldn’t beat the market this year. Fortunately, such years with an ever-increasing stock market are not the norm. Many of our option strategies benefit from calm stock markets and make their money with moderate movements. Conversely, this means that we outperform the market when it behaves “normally” or falls again.
Be that as it may, we are very much looking forward to the coming year and strongly expect that the broad market will not increase by 30% again. In addition, a little more calm should return to the commodity markets, which we trade heavily, once the customs and import disputes have been resolved.
Outlook for 2020
In the coming year, we will continue to carry out many trades with our income strategies and find and use attractive spots in the commodity markets. Our portfolio will continue to be supplemented by good stock picks and the use of exceptional situations that occur ad hoc.
Finally, we would like to wish you all a happy new year, and hopefully, a successful 2020.