CHI - The 8% Income Portfolio: 2023 Year-End Review

2024-01-26 09:00:00 ET

Summary

• 2023 year-end review of our 8% Income Portfolio.
• This high-income portfolio earned over $29,000 in distributions amounting to over 14% yield-on-cost basis and roughly 8.6% on average portfolio value.
• We will provide updates on trades during the year, dividends collected, and overall performance. As usual, we will compare the performance with a traditional 60:40 stock/bond portfolio.

This income-centric portfolio was launched in October 2014 with two simple goals. The primary goal of this portfolio was to provide roughly an 8% income while preserving the capital. The secondary goal was to provide some reasonable capital appreciation over the long term. This portfolio has completed a total of nine years now, and we have provided its progress periodically on public SA.

In our view, our "8% Income Portfolio" has continued to perform reasonably well under many different circumstances during the last nine years. Have we made some mistakes? Sure, in hindsight, yes. Obviously, after a very tough 2022 for most assets (most asset classes lost money in 2022), the year 2023 was mixed but overall positive. In the year 2023, the tech stocks and the "Magnificent Seven" performed extremely well. The S&P 500 (which has nearly 28% of its assets allocated to the top 7 tech stocks called Magnificent Seven) also did extremely well and gained over 25% for the year. Closed-end funds, or CEFs, generally performed well but were nowhere close to the performance of the S&P 500....

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