As 2023 draws to a close I am finalising my investing returns for the year. Overall it's been a great year, resulting in a 47% return for my portfolio. This compares with 26% for the S&P 500 Index.
If we look at my five year track record I have compounded at 15.4%, compared to 15.7% for the index.
Finally if we look back over the past 8 years, which is when I started formally tracking my returns the comparison is 11.3% for me vs. 13.2% for the Index.
What this goes to show is two things, firstly just how great the general stock market returns have been over the last few years, and secondly, how difficult it is to keep pace with the benchmark index.
I have a personal goal of generating annual returns of 15% which results in a doubling of portfolio value every 5 years. I don't base my investing around hitting this target, but I believe if I execute well it will be the outcome of a good process. It won't affect my life majorly if I undershoot and hit 10% returns, nor will it affect things if I overshoot and hit 20%.
I enjoy the process of researching companies, making bets based on my worldview, and seeing if things get vindicated or not. Even if I was told that I would get better returns by just dumping everything into an index fund, I would likely still continue to do my investing in individual stocks.
For the first 3-4 years of tracking (2016-2019) I was carrying a rather large cash balance (70-80% of total assets) which resulted in rather low returns. Since then the cash percentage has dropped gradually and is currently sitting at around 28% (which is the lowest it's ever been). As I get closer to being fully invested I believe my probability of beating the index will go up.
For now I am trailing the benchmark, I may or may not catch it, but will be sure to enjoy the ride.
If we look at my five year track record I have compounded at 15.4%, compared to 15.7% for the index.
Finally if we look back over the past 8 years, which is when I started formally tracking my returns the comparison is 11.3% for me vs. 13.2% for the Index.
What this goes to show is two things, firstly just how great the general stock market returns have been over the last few years, and secondly, how difficult it is to keep pace with the benchmark index.
I have a personal goal of generating annual returns of 15% which results in a doubling of portfolio value every 5 years. I don't base my investing around hitting this target, but I believe if I execute well it will be the outcome of a good process. It won't affect my life majorly if I undershoot and hit 10% returns, nor will it affect things if I overshoot and hit 20%.
I enjoy the process of researching companies, making bets based on my worldview, and seeing if things get vindicated or not. Even if I was told that I would get better returns by just dumping everything into an index fund, I would likely still continue to do my investing in individual stocks.
For the first 3-4 years of tracking (2016-2019) I was carrying a rather large cash balance (70-80% of total assets) which resulted in rather low returns. Since then the cash percentage has dropped gradually and is currently sitting at around 28% (which is the lowest it's ever been). As I get closer to being fully invested I believe my probability of beating the index will go up.
For now I am trailing the benchmark, I may or may not catch it, but will be sure to enjoy the ride.