Bah Humbug. You’d have thought that after such a dismal stock market year, Santa could have brought a decent relief rally. Alas, no. Thus we cap out the worst year in an eight-year history for the NAPS Portfolio on the back of the worst year for stock markets for more than a decade. With the benefit of hindsight, I can now reflect on the 15% fall since the start of the year and torture myself over the actions that could have avoided this outcome.
The thing is, at the start of the year, I knew this would happen. My instinct told me to adapt the strategy ahead of a probable reversal. But I chose not to. If I had, the portfolio could have ended the year with better returns. Was I right to ignore my intuition? Should I allow myself more discretion going forwards?
Before I answer these questions, let’s recap on the NAPS strategy, and explore its results in 2022 and over the long term. Let’s see if there are any answers hidden within my regrets, before we reveal the 2023 portfolio.
This is a long piece at more than 6,000 words. If you would like to download it as a PDF to print and read offline – download it here.
2022 Performance
The NAPS Portfolio is my “No Admin Portfolio System” based on a remarkably simple approach. Buy the top two ranked stocks in each of ten sectors and hold for a year. Repeat on each anniversary. While I’ve adapted the approach more recently, it takes barely an hour or two to administer per year and has proven remarkably effective. You can read up on the history of the portfolio in the column archives here. I am likely to reprise a webinar on the topic in the next few weeks – so if you are interested in learning more, do keep your eyes open for a New Year invite.
The Portfolio fell by 15% through 2022, which reflects poorly against the FTSE All Share, down 3%, but well against the FTSE AIM All Share – down a horrible 32%. As the AIM market is the favoured hunting ground of most UK private investors, the pain is very real for all of us.
On the other hand, over the longer term, the NAPS has performed superbly. Over…
