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|
|2011||-4.45||Eurozone debt crisis|
|2013||2.99||Fed Taper tantrum|
|2015||4.85||China slowdown. Oil dropped to below US$30|
|2016||1.83||Brexit, Donald Trump won Presidential election|
|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.
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