dimanche 16 mai 2021


Every year, around mid-may, there's a tradition: I take a look back at my portfolio since may 2009 to see how things are going.

I bought my first shares during the fall of 2008. So, at mid-may 2009, my portfolio was something like 6 months old. It's more or less the beginning of my investment life.

In 2020, I put a lot of money on my portfolio via a new mortgage. Since interest rates were very low, I thought that getting access to many thousands of dollars for something like 1,89% was a good idea. That's why my relative performance has been so fantastic between may 2020 and 2021 (on the other hand, there's a debt that comes with it, but a debt with almost no interests).

Don't forget that this increase of value is not only related to performance. It's also related to savings and I have to say that, in that field, I'm way better than at stock picking. So, don't take these numbers as an indication that I'm a great investor. I'm however a great frugal person. 

2009: year 0

2010: 75%

2011: 41%

2012: 38%

2013: 31%

2014: 50%

2015: 54%

2016: -8%

2017: 22%

2018: 19%

2019: 32%

2020: 16%

2021: 39%


In other words, my portfolio grew about 31 times since may 2009. And I've made big mistakes. Imagine if I knew how to select great stocks from the start? Imagine if I had kept all my 65 shares of Constellation Software bought in 2012?  

So, to achieve a 34% annual growth of your portfolio, I recommend the following:

1- Read great books about investment and analyze as much stocks as possible to be able to find exceptional stocks (you won't be able to find them if you don't compare at least 50 stocks, or even 100 stocks);

2- Save as much money as possible, year after year. Start early. And when you'll have 500 000$ or more, you'll be able to slow down and enjoy life before it's too late. With 500 000$ on the stock market, your annual savings may do some difference, but not a huge difference. That's when you'll have to be intelligent with your stock picking because it's gonna be all that matters (until then, your savings could mitigate your mistakes);

3- Learn how to balance your portfolio. Don't own any position over 10%. Yeah, Buffett is almost 50% Apple but I don't think it's a good idea. Why not 5 great companies with 10% each instead of only one for 50%? If you wanna gamble with speculative stocks, gamble small (like 1 or 2% of your portfolio);

4- After a few years, you must aim at being as independant as possible. It won't come before at least 5 years, maybe 10. But it should come, because you'll be an immature investor until then.

5- Probably not a great advice but you should try to get a job that pays a lot. You won't be able to save money if you don't earn money. In a world where everybody says that loving your job is the most important thing, that advice may appear not very popular. But I don't see how a passion at minimum wage could help you to get a massive portfolio. Well, try at least to not HATE your job. If you don't love it, be neutral about it. It could be a compromise. 

So, you the young 25 years old, apply all that. And when you'll be 37, you may contemplate your portfolio and see a 31 fold growth. You'll be able to say that you've achieved the zero-level-stress-related-to-money. 

2 commentaires:

  1. It would be interesting to see your net return for each and all those years (without the savings and of course after the fees).