Performance

Pilot investments were made using several proprietary strategies from January 2005 to January 2007. The strategy now called the Caldwell Dividend Strategy rendered the best results. As a matter of fact, the results were so impressive, that the pilot returns are not considered obtainable over a longer period of time with a broader sample. Here are the results of the pilot investments:

Average annualized total return for all stocks: 69.8%
Average annualized dividend yield for all stocks: 3.2%
Total stocks in pilot: 10
Time frame: January 2005 through January 2007
Average holding period per stock: 189 days
Number of stocks with positive return: 10
Number of stocks with negative return: 0

The next step was to initiate a test program with a broader sample.  The test program was used from April 2007 through December 2007.  The test program portfolio posted a loss of 1.2% while the overall market, as measured by the S&P 500 Index, posted a small gain.  After evaluation of the test program results, changes were made to the proprietary sell discipline of the strategy, which were intended to enhance performance. 

Goals for the Caldwell Dividend Strategy were then established, which are as follows:

Average annualized total return for the portfolio: 0-25%
Average annualized dividend yield: 4%
Number of stocks in portfolio at any given time: 15-20
Average holding period per stock: 270 days
Number of stocks with positive return (of 20): 16
Number of stocks with negative return (of 20): 4

The Caldwell Dividend Strategy was formally launched at the beginning of January, 2008.  Results for 2008 have far exceeded expectations.  As you can see below, the Caldwell Dividend Strategy  outperformed the S&P 500 Index by a dramatic 15.1% in the full year 2008.  .The twelve months of 2008 are considered one of the worst years in the history of the S&P 500 Index and the stock market in general, thus the loss posted by the Caldwell Dividend Strategy is considered a huge success.

The Caldwell Dividend Strategy was up 19.5% for 2009, 4.0% behind the S&P 500 Index, albeit with less risk.

 

 

 

 
 
 
 
 
 

 

 

 
 
Calculations of return above assume a $10 commission is paid each time a stock is bought and sold. Free cash balances are assumed invested in a government money market fund. The effective rate of the Schwab Government Money Fund (SWGXX) is used for the purposes of calculating portfolio dividends on free cash balances. Monthly dividends on free cash balances are based on the money fund balance at the beginning of the month. Dividends are considered paid on the ex-dividend date, as the stock price is reduced by that amount on the ex-dividend date.

 

 


2008 return:   (23.4)%               S&P 500 Index 2008 return:  (38.5)%
(for the period 1/1/08 - 12/31/08)