Monthly Performance Report for
Stake
Net Current Yield
Annualized Percentage
Since Inception
Yield Performance
| Yield Summary | Year to Date | |
|---|---|---|
| Option Premiums | ||
| Capital Gain | ||
| Interest & Dividends | ||
| Brokerage Commissions | ||
| Management Fee | ||
| Net Current Yield |
Account Performance
| Contributions/Distributions This Month | |
| Net Investment | |
| Cumulative Net Current Yield | |
| Stake | |
| Account Value |
Asset Allocation
Commentary
Commentary
Account Value
The market value of all the securities in your portfolio plus the cash.
Accrued Fees
Asset management fees that you incurred, but haven't been billed yet.
Annualized Percentage
The Net Current Yield as an annualized percentage of your Stake. Obtained by taking your Net Current Yield for the month, dividing it by your Stake for the month and multiplying the number by 12.
Book Value
The purchase price of all the securities in your portfolio plus the cash.
Brokerage Commissions
Fees the broker charges to take your stock and option orders to the market.
Capital Gains
The difference between the purchase price and sale price of your stock once the position is closed.
Cumulative Net Current Yield
The sum of each month's Net Current Yield since Snider Advisors began managing your account.
Interest & Dividends
Interest earned from cash in the account (or margin interest charged by the broker if the account is in margin). Plus dividends paid as a result of owning specific stocks.
Net Current Yield
The income from option premiums, interest and dividends, plus the realized gain (or minus the realized loss) from stocks in all closed positions, minus commissions paid for stock and option transactions and management fees. This amount does not equal your taxable income.
Net Investment
All your deposits to the accounts managed by Snider Advisors minus any withdrawals you have made from these accounts. If you pay your fees directly to Snider Advisors, these fees are considered contributions to your account.
Option Premiums
The cash derived from the sale of options expiring in October 2008. These options were sold in the previous Trade Day.
Stake
Your initial investment plus any subsequent investments and minus any withdrawals, plus interest and dividends, plus the profit from any closed position, minus asset management fees. Commissions reduce the profit from closed positions.
Taxable Income
The amount of income you need to show on your tax return (for taxable accounts). This is calculated using different rules than the Current Yield.
Unrealized Loss (or Gain)
The difference between the purchase price of a security and the price you could get by liquidating the security.
| Jesse Anderson, CFA | |
| Email: | Janderson@snideradvisors.com |
Asset Allocation
The Fine Print
The yield calculation is different than the return calculation shown by most investment advisors. The yield is approximately equal to the total return if and when a position closes. While the position is open, there is typically some amount of unrealized loss. The total return measurement would include these losses and so would be lower than the yield. The rules of the Snider Investment Method prohibit selling stocks at a loss, but this does not limit or prevent the accumulation of unrealized losses which are not included in the yield calculation. These unrealized losses could persist indefinitely and may never be reflected in your net current yield.
The yield includes option premiums, interest, dividends, and realized gains or losses from closed positions, but excludes unrealized gains or losses from open positions. Brokerage commissions are deducted before calculating both the gross and net yield. The net yield has the asset management fees deducted. The percentage yield is the yield for the month divided by the stake multiplied by 12. The stake is all contributions minus withdrawals, plus the profits or minus the losses from any closed positions. For a complete discussion of the calculation of yield, please see the Performance Discussion page on our website.
The yield figures are unaudited and are subject to change. The information contained herein is current as of the date hereof, but may become outdated or subsequently may change. Past performance is no predictor of future results. All investments involve risk, including possible loss of principal.
Commentary
Please Update Asset Management Agreement
We recently added a new electronic contract tool to our website to capture your signature and store all our contracts. It will allow us to keep your contract language consistent across all levels of service and quickly provide notifications of updates to your agreement.
Most of our agreements date back to when you originally signed up for Asset Management services. That means for some clients it was done on paper back in 2002! Due to rule changes, recommendations from compliance consultants, and best practice recommendations from regulators, we've made many slight adjustments to the contract to keep it up-to-date. In combination with some language adjustments and our new electronic contract tool, we are asking you to update your agreement. You can follow this link to complete the process.
Keep in mind, there are NO changes in the fees or terms of your service.
If your profile and suitability information is out of date, you will also be asked to provide any updates. As an SEC-registered investment advisor, we are required to know our client and receive regular updates about their financial situation and investment objectives.
Thank you in advance for your prompt attention to this matter. And of course, we truly appreciate your business and on-going support.
Update Agreement2021 Commentary
Closing the books on 2021, I couldn’t be more pleased. The Snider Investment Method had a great year.
Each year I take a little extra time to share some insights along with your Annual Report. Today, I want to recap 2021’s performance and look at what might be in store for 2022 and beyond.
Across the board, we saw stellar numbers in performance. The year was fueled by a terrific start. Our yield in the first quarter of 2021 was the 5th highest in our history. The other top performing quarters happened way back in 2004 & 2006. It is amazing how many clients we still have from those early years. They loved to ask if we could ever see those types of results again, and I’m happy to report we can. In the past, I had to trust my confidence in the Method. Today, I can point back to 2021 to show we are still very capable of producing significant income for investors.
All investments will experience periods of both above average and below average performance. We all focus on the “average” when in reality no one person may be average. Instead, it is a bunch of data points scattered around to produce an accurate representation of results. The years following the financial crisis were below average. Even then, it was uncommon for me to be displeased with the results given the difficult conditions. Knowing that we can maintain income through difficult periods and that below average is frustrating but not devastating, only brings me more confidence. We can weather whatever we have in store for the future and come back as strong or better than ever.
Overall, we had very stable, consistent results throughout the year. This is exactly what I’m hoping to produce and what our clients have come to rely on in retirement. Our performance was aided by a great year for the stock market, but expectations entering the year were low. Very few so-called “experts” forecast the market to perform as well as 2020. Instead, it did even better while still dealing with the pandemic. Trying to predict the future and position a portfolio accordingly has proven over and over again as a poor strategy. Fortunately, we have a rock solid plan in place ready to produce in both good and poor conditions.
In addition to performing well, I’m also pleased with how our portfolio is positioned for the future. Throughout 2021 we closed many positions. Many of these were older positions and some had been open for over a decade. Currently, many of our open positions are very young, with only a few purchases. Young positions are less likely to go into winter and we have plenty of cash available for future purchases. This also gives us protection if the market heads south in the near future.
Let’s take a look at what’s to come.
Looking at 2022 and beyond, I’ll cover three of the most common questions/concerns I hear from clients. First, inflation is on everyone’s mind. For the first time in many decades, we are seeing and feeling the pains of inflation. Right behind inflation comes interest rates. Something dramatic would have to happen for us not to see the Fed move rates aggressively higher in 2022. And finally, we’ll look at continued growth including the obstacles with employment and the supply chain.
Inflation is painful because we see and “pay” for it over and over again. In recent history, we’ve been fortunate to live in a very low inflationary environment. Current conditions are especially cruel to our clientele; retirees living on a fixed income. Fortunately, our income has been higher allowing for adjustments to withdrawals when necessary. If the pains of inflation are hitting you particularly hard, we can review your withdrawals and make the appropriate adjustments for higher prices. Inflation is hard on our pocketbooks, but the stock market can deal with inflation and the right companies can move higher under these conditions.
You can’t talk about inflation without looking at higher interest rates. Low rates fuel inflation. We borrow cheap money to buy more goods and services to keep the economy going. When money becomes more expensive, those purchases slow. The powers at be were able to keep the economy in good condition throughout the pandemic. Now, they must slow the pace of growth and reduce the inflation rate. One of the most surprising aspects of 2021’s good performance was that it was done with zero interest rates. Our cash earned almost nothing throughout the year. Back in the early days of Snider Advisors, our cash could earn 4% or 5% annually. We are a long way from those types of rates, but higher rates will increase the interest payments on our cash to boost this area of income generation.
Our economy grew at 5.7% in 2021. This was the largest growth since 1984. For large, developed economies like the U.S., it is unusual to see this type of growth. What’s amazing is that it did so facing challenges with both employment and supply. Wages for employees are increasing and finding skilled, reliable labor is a struggle nearly all businesses faced in 2021 and will face moving forward. Along with this, we’ve all heard the excuse of the “supply chain” by now. Whether it is raw materials, parts, or finished products, consumers are struggling to get their hands on the goods they need. Neither of these issues signal an end to inflation, but the pent up demand and limited supply should keep the economy growing.
The government has spent a lot of money to keep us rolling through this crazy time. They plan to keep spending in the near future. With that mentality, it is difficult to predict an end to the good times. If we get a disruption in the economy, it will likely come from something we didn’t predict. I mentioned earlier that I am extremely pleased with the position of our portfolio. We are well-equipped to maintain these income levels, but guarded against a decline. We have the cash ready to put to work, and room in our portfolio for more purchases. This is the biggest factor in generating a consistent income in both up and down markets.
Thank you for a good year! As I said in the beginning, we couldn’t be more pleased. Life has been crazy over the last two years, but I hope that the Snider Method has given you some security in a world filled with uncertainty.
We appreciate your continued trust and support,
Jesse Anderson
214-446-8533
