Return on Invested Capital – 2011 to 2018

Return on Invested Capital tracks the performance of investments. It tells about income made on these investments in a year. Any realised capital gains and losses made on investments are added to and deducted from streams of dividends and interest income (coupons) earned on these investments throughout the year.

It shows how well the investor had been doing with their investments in generating income for him in that year.

I tracked these statistics since 2011. For this year, my ROIC was 2.40% per annum. 2018’s ROIC (2.40%) was lower than 2017’s (3.89%).

2.40% return is not a good number bearing in mind that CPF Ordinary Account earns 2.5% per annum. I was cautious in 2018 and a third was in cash (univested).

Return on invested capital
Year ROIC (%) Remarks
2011 -4.45 Eurozone debt crisis
2012 2.59
2013 2.99 Fed Taper tantrum
2014 5.06
2015 4.85 China slowdown. Oil dropped to below US$30
2016 1.83 Brexit, Donald Trump won Presidential election
2017 3.89
2018 2.40 US Trade War with China

2011 was a particularly bad year with negative return of -4.45%. That year, I started to book losses by selling some high-risk investments at losses.

Copyright © 2018, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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