2006 in review

I won't make this super long, and I'll start posting more now that my daughter is born and I'm back in the swing of managing my funds regularly again.

With Q4 and 2006 now officially at a close I thought I'd recap a little bit. For December I had a return of .89% vs the S&Ps 1.72%, and for Q4 I had a return of 7.21% vs the S&Ps 4.85%. I attribute some of my December underperformance to the fact that I didn't get to watch things very closely missing a lot of trading days dealing with the birth of my daughter (which was obviously worth it).

A lot of my outperformance in Q4 came from pretty much perfectly timing the sector rotation out of defense stocks (not like military stocks, but your soups/soaps/cereals stocks like Proctor and Gamble and General Mills) and into technology and retail stocks ahead of the Christmas season. My timing was nearly perfect in getting out of the defense stocks right as they were topping and getting into the technology and defense stocks just 2-3 weeks after they'd started to run.

For the year, I returned 14.44% vs the S&Ps 14.14%. This is a bit misleading because I didn't start managing my own money until July of this year, so I only have 6 months of performance vs the S&Ps 12 months. That being said, I also dodged the horrible May of the year and the first half of 2006 was not near as good as the second half. I still fell I outperformed pretty handily though, and am looking forward to seeing how well I can do in 2007 now that I'm a more 'seasoned' investor.

I'll try and make another post with some thoughts to 2007 before the markets open again on Wednesday. Until then I hope all of you had a good year as well!

-Rizen