2021 Performance Review (Part 1)

Today I begin a mini-series to update my trading performance through 2021.

I haven’t done a performance update in a while, but I should do this every year. My first such review began with this post. Four years later I did this one. Later that year I also did this post with some nice graphs and data. The following year I did this one. Finally, I did this one to finish up a draft I had begun months earlier. This post includes some performance notes.

2021 was my best trading year ever. One could say I was lucky. Then again, as traders we are always lucky whenever a different market environment would have resulted in a much worse outcome. This is especially the case when the superior performance is realized in the face of an improbable (subjectively defined) market environment.

I tend to be reluctant to take credit for things I do not control. I do not control the market, but I am the one doing the trading and for that I deserve credit. Certainly if my account tanks, I will always get the blame by my own worst critic (for starters).

Some of this is about humility, which is a topic I have written about or alluded to in the last paragraph here, this post, this mini-series, this mini-series, this post, and this mini-series where I gave a very honest and open evaluation of myself.

Aside from reviewing my 2021 trading performance, in what follows I will go back to 2001 and recalculate the numbers relative to different indices factoring in dividend yield and tax differential for active trading. I incur a 60/40 blended tax rate compared to the benchmarks, which for purposes here will be considered LTCG. I don’t have a CIPM®, but I think any accurate performance comparison should address this point.*

Because my original plan was to crunch numbers in Python, this has become more of an ordeal than anticipated. My spreadsheet breaks down monthly periods by the last Friday of each month being the starting point for one period and the ending point for another. Not every Friday is a trading day (holidays), though, which means I sometimes use Thursday values. I’m fine giving a Friday date even when there is no trading on that day because it’s still a true statement. In some extreme cases, we may have had no trading on a Thursday and a Friday. Programming all this can get rather involved.

I will continue next time.

* — If you start reading performance reports, I think you will come to the realization that most do not.