Posted on by Phil

My Public Equities Returns Over 20 Years (ages 12-32)

A few weeks ago I asked Fidelity to send my brokerage history dating back to when I opened the account in 1998.  Last week I got a big package in the mail and so thought it’d be a great time to go through my investing track record!

When I got into the market

When I was in 5th grade, I really wanted to open a brokerage account.  It was the beginning of the dot com bubble, and everyone seemed to be talking about the stock market.  It seemed like a good way to make money.

I’d heard stories of how my Dad took his paper route money when he was a kid and started trading stocks.  But, he was a bit reticent to let my brother (a year younger) and I open accounts given the market was so hot, and that we had a good chance of starting out investing at the peak of a cycle.

Luckily, my Mom thought it was a good idea and eventually took us to Fidelity one afternoon to open accounts.

By this time, I was 12 and in 6th grade.  But, not too young to start saving (in fact we’d opened savings accounts when I was in first grade – the idea that for every $100 I scrapped together I could get $5/yr for free was too good to pass up – this was when interest rates weren’t 0%).

My Performance

The first year was rough.  I bought one stock, MXE, a Mexican Holding company (like Berkshire Hathaway, but cheaper, and maybe the Mexican market was being overlooked, was the vague investment thesis).  It went down 17% that year (I eventually made a modest profit off it).  Most of my ideas in the early days were from reading Worth magazine to see which stocks they were pumping at the time, and then pick the one I liked the most.

The next three years were pretty amazing though.  I traded in and out of a few tech stocks.  I was in cash for the blow up in 2000.  And, I was finally was able to afford a share of BRK.B (Berkshire Hathaway’s “b class”).  These all lead me to beating the market by 125% over 1999-2001.  Finally, I had that freshman year nest egg I always dreamed of :).

I won’t bore you with every trade (there were many over the decades, but not that many each year).  In summary, here’s a chart of my annual returns over the last ~20 years:

Over the next decade or so, I made some good calls and bad ones.  Overall, I tend to beat the market in down turns, and lag it when things are going great.

Here’s a chart of my annual returns relative to the S&P 500:

I’m proud to say that my public equities have outperformed the S&P 500 by about 3% per year on average.  Of course, a lot of this is luck.  I had some rational behind every trade I made, but does a freshman in high school really know what they are doing?

It’s interesting to note that my annual returns are starting to converge closely with the S&P 500 over time:

Scorecard

The S&P has returned a 6.5% IRR since 1998 – 2017 (when my data ends for now), vs my 9.5% average annual return.

Overall for every dollar put into the S&P in 1998, you’d expect to have $3.29.  For every $1 I invested, I have $5.59, which is about 41% more.

Data notes

I’m understating my returns a bit here.  My transaction costs were around $20/trade when I started, which was a meaningful amount of money relative to my overall portfolio.  So, my returns are probably a bit higher each year, especially in those early years (>1% of my portfolio went to fees in 1999 alone).

I got the S&P return data here for reference.

I almost calculated a sharpe ratio, but realistically I’d need to do a lot more data analysis on my portfolio and I don’t have all the info I need.  However, I’d like to think my standard deviation relative to the S&P is lower given I’ve always had a decent amount of money in cash.

What I learned

  • Starting to invest/save early has a few major advantages including compounding, as well as working towards your 10,000 hours to “master” money management.
  • You can start with a very small amount of money, my first savings account had <$100, and as long as you have >$1,000, you can start investing in the market.
  • It’s important to take a long term view on your savings/investing.  I’ve never withdrawn money from my Fidelity account.  This is money I don’t need, and won’t need unless something very terrible happens.
  • Don’t freak out during downturns, and don’t think you’re a genius when you make a lot of money.  A lot of this is luck, which hopefully evens out over time.
  • You have to pay up for really great companies – I sold Amazon 5 years ago because it was very “expensive” on a P/E basis.  This is really hard for someone like me who’s naturally frugal.
  • Analyzing your investing style and decisions can give you some insights into your personality/strengths/weaknesses – I’m less aggressive than I should be, cheaper than I should be, and tend to focus on ‘contrarian’ opportunities more than average.
  • Almost no one can consistently beat the market – this is why the  majority of my money is now in low cost ETFs, with a few exceptions.  Of course, if you are extremely shrewd and level headed and can dedicate >10 hrs/day to it, there is a lot of alpha out there.
  • You can’t regret bad decisions and missed opportunities, just learn from them.
  • Allowing your child to start investing with a small amount of money is a good idea, as long as they are very interested in it, and prudent.  They’ll lose money at some point, which is a good thing.  And, over time, they’ll learn a lot while saving along the way.

More to come

I’ve had the opportunity to do some investing in private tech companies, and so would like to update my overall annual investing IRR with these returns in a future post.  Overall I’d estimate I’ve gotten around a 7x return on these investments over the past 8 years.  It should be very interesting data to add!

4,222 Replies to “My Public Equities Returns Over 20 Years (ages 12-32)”

  2. Hi, I do think this is a great website. I stumbledupon it 😉 I may return once
    again since i have book-marked it. Money and freedom is the greatest way to change, may you be rich and continue
    to guide other people.

  3. An impressive share! I have just forwarded this onto a friend who has
    been conducting a little homework on this. And he in fact ordered me dinner because
    I discovered it for him… lol. So let me reword this….
    Thank YOU for the meal!! But yeah, thanks for spending time
    to discuss this issue here on your internet site.

  4. Hi are using WordPress for your site platform?
    I’m new to the blog world but I’m trying to get started and create my
    own. Do you need any html coding knowledge to make your own blog?

    Any help would be really appreciated!

  5. Hi, I do think this is a great site. I stumbledupon it 😉 I’m going to revisit
    once again since I saved as a favorite it. Money and freedom is the best way to change, may you be rich and continue to guide other people.

  7. Great post. I used to be checking continuously this weblog and I’m impressed!
    Very helpful information specifically the remaining phase 🙂 I maintain such info a lot.
    I was seeking this certain info for a very long time. Thank you and best of
    luck.

  8. I’ve been browsing online more than 3 hours
    today, yet I never found any interesting article like yours.
    It is pretty worth enough for me. In my opinion, if all
    site owners and bloggers made good content as you did,
    the internet will be much more useful than ever before.

  10. When someone writes an paragraph he/she maintains the image of a user in his/her
    brain that how a user can be aware of it. Thus that’s why this post is outstdanding.
    Thanks!

  11. I do agree with all the ideas you’ve introduced for your post.
    They’re really convincing and will certainly work. Nonetheless,
    the posts are too brief for starters. May just
    you please lengthen them a little from next time? Thank you for the post.

  12. Great article! This is the kind of info that should be shared around the internet.
    Disgrace on the search engines for not positioning this publish higher!

    Come on over and discuss with my site . Thanks =)

  15. I have been browsing on-line more than 3 hours as of late, but
    I never discovered any attention-grabbing article like yours.
    It is pretty price enough for me. In my view, if all site owners and bloggers made good content material as you probably did, the net will likely be a lot
    more helpful than ever before.

  16. I do believe all of the concepts you have introduced on your post.
    They’re really convincing and can definitely work. Nonetheless, the posts are
    too short for novices. May just you please prolong them a bit from next time?
    Thank you for the post.

  18. Wow that was strange. I just wrote an really long comment but after I
    clicked submit my comment didn’t appear. Grrrr…
    well I’m not writing all that over again.
    Anyhow, just wanted to say great blog!

  19. Hi there, i read your blog occasionally and i own a similar one and i was
    just curious if you get a lot of spam responses?
    If so how do you prevent it, any plugin or anything you can advise?
    I get so much lately it’s driving me insane so any assistance is
    very much appreciated.

  21. Normally I do not learn post on blogs, but I wish to say
    that this write-up very compelled me to check out and do it!

    Your writing taste has been amazed me. Thank you,
    quite nice post.

  23. Hi there are using WordPress for your blog platform?
    I’m new to the blog world but I’m trying to get started and
    create my own. Do you require any html coding expertise to make your own blog?
    Any help would be really appreciated!

  24. Hi there all, here every one is sharing these kinds of knowledge,
    therefore it’s pleasant to read this web site, and I used to go to see this website every day.

  25. Oh my goodness! Impressive article dude! Thank you so much, However I am going through problems with your RSS.
    I don’t understand why I cannot join it. Is there anyone else getting identical RSS problems?
    Anybody who knows the answer can you kindly respond?
    Thanks!!

  27. May I simply just say what a comfort to find somebody that
    actually understands what they’re talking about on the web.
    You actually realize how to bring a problem to light and make it important.
    More people have to read this and understand this side of your story.
    I was surprised that you are not more popular given that you most certainly have the gift.

  28. Hello! I’ve been following your website for a long time now and finally got the bravery to go ahead and give
    you a shout out from Austin Tx! Just wanted to say keep up the great work!

  30. Have you ever considered about including a little bit more than just your articles?
    I mean, what you say is valuable and everything. However just imagine if you added some great
    photos or video clips to give your posts more, “pop”!
    Your content is excellent but with images and
    clips, this website could undeniably be one of the greatest in its field.
    Terrific blog!

  31. You are so awesome! I do not suppose I’ve truly
    read a single thing like this before. So good to find someone with genuine thoughts on this subject
    matter. Really.. many thanks for starting this up.
    This web site is one thing that is required on the internet, someone with a little originality!

  33. Have you ever thought about writing an ebook or guest authoring on other websites?
    I have a blog centered on the same topics you discuss
    and would really like to have you share some stories/information. I know my audience would
    value your work. If you’re even remotely interested,
    feel free to shoot me an e-mail.

  34. I am extremely impressed with your writing abilities and also with the
    format in your weblog. Is that this a paid subject matter or did you modify it your self?
    Anyway stay up the excellent high quality writing, it is rare to see a great weblog like this one nowadays..

  36. It’s really a nice and useful piece of information. I am
    happy that you simply shared this helpful info with us.
    Please keep us up to date like this. Thanks
    for sharing.

  37. Please let me know if you’re looking for a author for your blog.
    You have some really good articles and I think I would be a good asset.
    If you ever want to take some of the load off, I’d love to write some
    content for your blog in exchange for a link back to mine.
    Please shoot me an e-mail if interested. Kudos!

  38. Your style is really unique compared to other folks I’ve read stuff from.

    Thanks for posting when you have the opportunity, Guess I’ll just bookmark this blog.

  42. Thanks for any other magnificent post. Where else could anybody get
    that kind of information in such an ideal means
    of writing? I’ve a presentation next week, and I’m at the
    search for such info.

  45. Write more, thats all I have to say. Literally,
    it seems as though you relied on the video to make your
    point. You clearly know what youre talking about, why throw away
    your intelligence on just posting videos to your site
    when you could be giving us something informative to read?

  47. hey there and thank you for your info – I have definitely picked up anything new from
    right here. I did however expertise a few technical issues using this website, as I experienced to reload the site lots
    of times previous to I could get it to load properly. I had been wondering if
    your hosting is OK? Not that I am complaining, but slow loading instances times will often affect your placement
    in google and can damage your high quality score if ads and marketing with Adwords.
    Anyway I am adding this RSS to my e-mail and could look out for a lot
    more of your respective fascinating content. Ensure that you
    update this again very soon.

  48. Fantastic goods from you, man. I have understand your stuff previous
    to and you’re just too excellent. I actually like what you have acquired here, certainly like
    what you’re saying and the way in which you say it. You make it enjoyable and you still care for to keep it smart.
    I can not wait to read far more from you.
    This is actually a wonderful website.

Comments are closed.