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)”

  6. Hi, I do believe this is an excellent blog. I stumbledupon it ;
    ) I may come back once again since i have book marked it.
    Money and freedom is the best way to change, may you be rich and
    continue to help others.

  7. Good day I am so grateful I found your weblog, I really found
    you by accident, while I was searching on Askjeeve for something else, Anyways I am here now and would
    just like to say thanks a lot for a incredible post and a all round enjoyable blog (I also love the theme/design), I
    don’t have time to read through it all at the moment but I have saved it and
    also included your RSS feeds, so when I have time I will be back to read much more, Please do keep up the awesome job.

  9. First off I want to say awesome blog! I had a quick
    question which I’d like to ask if you do not mind.
    I was interested to find out how you center yourself and clear your mind before writing.
    I’ve had trouble clearing my thoughts in getting my thoughts
    out there. I do take pleasure in writing
    however it just seems like the first 10 to 15 minutes are usually lost simply just
    trying to figure out how to begin. Any ideas or tips?
    Cheers!

  10. Hey there! I realize this is somewhat off-topic but I needed to ask.

    Does operating a well-established blog such as yours require a massive amount work?

    I am completely new to running a blog but
    I do write in my diary every day. I’d like to start a blog
    so I will be able to share my experience and views online.

    Please let me know if you have any kind of ideas or tips
    for new aspiring blog owners. Appreciate it!

  11. Excellent post. I was checking continuously this blog and I am impressed!
    Extremely helpful info specifically the last part
    🙂 I care for such information a lot. I was seeking this particular information for
    a very long time. Thank you and good luck.

  12. Do you have a spam problem on this site; I also
    am a blogger, and I was curious about your situation; many of us
    have created some nice practices and we are looking to trade solutions with other folks, be sure to shoot me
    an e-mail if interested.

  13. Woah! I’m really enjoying the template/theme of
    this site. It’s simple, yet effective. A lot of times it’s challenging to get that
    “perfect balance” between usability and visual appearance.

    I must say you’ve done a amazing job with this.
    Additionally, the blog loads very quick for me on Safari.
    Excellent Blog!

  18. Do you mind if I quote a few of your articles as
    long as I provide credit and sources back to your weblog?
    My website is in the exact same area of interest as
    yours and my visitors would truly benefit from a lot of the information you provide here.
    Please let me know if this alright with you. Many thanks!

  19. I am curious to find out what blog platform you’re utilizing?
    I’m experiencing some small security problems with my latest blog and I would like to
    find something more risk-free. Do you have any solutions?

  22. I do consider all of the ideas you’ve offered in your
    post. They are really convincing and will certainly work.
    Nonetheless, the posts are too quick for starters. May just you please
    prolong them a bit from next time? Thanks for the post.

  23. Does your blog have a contact page? I’m having a tough time locating it but, I’d like to shoot you an e-mail.
    I’ve got some suggestions for your blog you might be interested in hearing.
    Either way, great site and I look forward to seeing it expand over time.

  28. It’s truly very difficult in this full of activity life to listen news on TV, therefore I only use the web for that
    purpose, and get the hottest news.

  29. Hi there just wanted to give you a quick heads up.
    The words in your article seem to be running off the
    screen in Firefox. I’m not sure if this is a formatting issue or something
    to do with internet browser compatibility
    but I figured I’d post to let you know. The design and
    style look great though! Hope you get the issue resolved soon. Cheers

  31. Thanks for a marvelous posting! I definitely enjoyed reading it, you
    may be a great author. I will remember to bookmark your blog and will eventually
    come back down the road. I want to encourage you to continue your great work, have a
    nice weekend!

  32. What i do not realize is actually how you’re now not actually a lot more neatly-liked
    than you might be right now. You’re so intelligent.
    You already know therefore significantly in the case of this topic, made me individually consider it from a
    lot of varied angles. Its like women and men don’t seem to be interested until it is something to accomplish with
    Woman gaga! Your own stuffs outstanding. At all times deal with it up!

  33. I don’t even understand how I stopped up here, however I thought this put up
    was once great. I do not realize who you’re but certainly you’re going to a well-known blogger should you aren’t already.
    Cheers!

  34. Oh my goodness! Amazing article dude! Thank you,
    However I am encountering troubles with your RSS. I don’t understand the reason why I am
    unable to join it. Is there anybody else getting identical RSS problems?
    Anyone that knows the answer will you kindly respond? Thanx!!

  36. Hmm it appears like your site ate my first comment (it
    was super long) so I guess I’ll just sum it up what I submitted and say,
    I’m thoroughly enjoying your blog. I as well am
    an aspiring blog blogger but I’m still new to everything.

    Do you have any recommendations for inexperienced blog writers?

    I’d genuinely appreciate it.

  37. Excellent beat ! I wish to apprentice while you amend your web site,
    how could i subscribe for a blog site? The account helped me a acceptable deal.

    I had been a little bit acquainted of this your broadcast provided bright clear concept

  38. Greetings I am so delighted I found your weblog, I
    really found you by error, while I was researching on Bing for something else, Regardless
    I am here now and would just like to say cheers
    for a incredible post and a all round interesting blog (I also love
    the theme/design), I don’t have time to go through it all at the moment but I have book-marked it and
    also included your RSS feeds, so when I have time I will be back to read more,
    Please do keep up the excellent job.

  39. It’s appropriate time to make some plans for
    the future and it’s time to be happy. I have read this
    post and if I could I wish to recommend you few fascinating issues or suggestions.
    Maybe you can write next articles referring to this article.
    I want to learn more things about it!

  40. whoah this weblog is great i love reading your articles.
    Stay up the good work! You realize, many persons are hunting around for this info,
    you could aid them greatly.

  42. Hi, i read your blog from time to time and i own a similar one and i was just wondering if you get a
    lot of spam remarks? 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 help is very much appreciated.

  43. It’s in point of fact a nice and useful piece of information. I am satisfied that you simply shared
    this helpful info with us. Please stay us informed like this.
    Thanks for sharing.

  44. 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 weblog when you could be giving us something enlightening to read?

  48. Howdy! This is my first visit to your blog! We are a collection of volunteers and starting a new project in a community in the same niche.
    Your blog provided us beneficial information to work on. You have done a wonderful job!

  50. Just desire to say your article is as amazing.
    The clearness in your post is simply excellent and i can assume you’re
    an expert on this subject. Well with your permission allow me to grab your feed to keep up
    to date with forthcoming post. Thanks a million and please
    carry on the enjoyable work.

Comments are closed.