I made our first foray into the stock market on 1st November 2010.
It’s been 7 years and the 15HWW portfolio currently stands at around $430,000. It comprises $350,000 of capital which also means that the remaining $80,000 comes from net profits, dividends and interest from the deployment of the capital.
I have kept a detailed record of my investment transactions over this period but not the cash injections into the portfolio. Accounting for cash is messy but excluding cash tends to overstate the portfolio return if the equities are performing better than the other instruments.
But interestingly, since it’s been $350,000 of capital over 7 years, I think it’s a good proxy to assume that we are injecting $50,000 every year which is also equivalent to injecting $12,500 every quarter.
7 Reflections & Pointers:
- Pretty surprisingly, the annualised return is exactly 6.0%, which is the target I had set for myself half a year back. 6.0% is proving to be a reasonable target to aim for the entire portfolio.
- I had overestimated my abilities when I was a fresh newbie. Honestly, 7 years ago, I would have scoffed at this set of results and expected a return above 10%. Pretty unrealistic.
- The market is a good place to find out more about yourself and your biases. In the first few years, I really had this tendency to sell my winners and keep the losers. I am also especially vulnerable to the anchoring bias, finding it hard to average up on a winner. Luckily, I haven’t really paid expensive fees in this process of learning more about myself.
- It’s inevitable to make losses on some investments. From Sembcorp to Wilmar to MTQ and to M1, I have made losses of a few thousand dollars on each of them. I just had to make sure the winners such as Spindex, Vicom, MCT and Berk B more than make up the difference.
- Over this 7 year period, the equities proportion has varied from 45% to 75% and this range is the extent of market timing that I will likely perform. This will ensure that I don’t make the biggest mistake, which is staying out of the market for too long a period.
- 7 years is not very long. In fact, more seasoned investors will point out that I have not experienced a market crash. Nonetheless, the corrections in 2012 and 2016 should be able to help me when a big bear comes.
- Investing is an iterative process. Very notably, I made some rash decisions to dump sizeable positions in bank and property stocks during Brexit a year ago. I am learning and since I should still have quite a few decades to look forward to, I expect the performance of the 15HWW portfolio to improve over time.