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)”

  1. ترک خود ارضایی از نظر علمی کاملا ممکن است.

    بخش زیادی از ترک اعتیاد به این عمل مانند هرگونه اعتیاد دیگری
    جنبه های روحی و روانی زیادی دارد.
    بنابر این نیاز است که با تمام اراده خود تصمیم به ترک گرفته باشید
    و از شکست هراسی نداشته باشید.
    در ادامه راه هایی برای ترک خود ارضایی که از نظر علمی ثابت شده اند را بازگو می کنیم.

    ورزش کنید
    ورزش انرژی مازاد شما را کاهش می دهد.
    ورزش علاوه بر آن شادابی و نشاط نیز
    با خود به ارمغان می آورد. ورزش هایی مثل دوییدن و شنا می
    توانند باعث ترشح اندورفین
    در بدن می شود. اندورفین هورمون شادی و نشاط در بدن است.

    همچنین ورزش هایی مانند یوگا می تواند آرامش و اضطراب
    ناشی از ترک خود ارضایی را به طور چشمگیری
    کاهش دهد و موجب آرامش هرچه بیشتر گردد.

    تغذیه سالم
    تغذیه سالم با میوه و سبزیجات کافی می تواند همیشه سطح انرژی شما را
    در سطحی متعادل نگه دارد و احساس خستگی
    و کسلی را از افراد دور نماید.

    احساس سرزندگی و نشاط می تواند افراد را از کارهایی مانند خود ارضایی
    که که به بدن آسیب وارد می کند منع نماید.

    خواب کافی
    کم خوابی با خود بی هدفی و کسالت به دنبال خواهد آورد.
    نداشتن خواب کافی به مرور افراد را دچار افسردگی می کند.
    تنظیم عادت خواب و همچنین خواب کافی به میزان 8 ساعت
    در روز می تواند احساس افسردگی
    را از افراد دور می کند.

    حمام آب سرد
    حمام آب سرد در زمانی که وسوسه های خود ارضایی به
    سراغ افراد می آید می تواند معجزه
    کند. این روش به خوبی می تواند جلوی
    هر تکرار عمل خود ارضای را بگیرد.

    تنها نباشید
    معمولا خودارضایی و وسوسه های آن زمان به سراغ افراد می آید که
    تنها هستند. به همین دلیل توصیه می شود برای ترک
    خود ارضایی بهتر است خود را
    در موقعیت هایی قرار دهید که تنها نباشید.

    از تماشای فیلم ها و عکس های مستهجن دوری کنید
    فیلم ها و عکس های مستهجن می توانند یک عامل مهم در
    شروع وسوسه برای خود ارضایی باشد.
    ترک خود ارضایی زمانی ممکن می شود که
    افراد عامل محرک وسوسه ها را
    پاک کنند. فیلم های پورن و عکس های مربوط به صحنه های سکسی
    به طور یقین یکی از همین عوامل محرک
    است که افراد به راحتی می توانند از دیدن آن صرف نظر کنند.( اختلال
    تماشاگری جنسی)

    از یک مشاور کمک بگیرید

  3. I was curious if you ever considered changing the layout of your site?
    Its very well written; I love what youve got to say. But maybe you could a
    little more in the way of content so people could connect with it better.
    Youve got an awful lot of text for only having one or two images.
    Maybe you could space it out better?

  4. Spot on with this write-up, I honestly feel this web site needs far more attention. I’ll probably be returning to see more, thanks for the advice!

  8. This design is spectacular! You certainly know how to
    keep a reader entertained. Between your wit and your videos, I was almost moved to start my
    own blog (well, almost…HaHa!) Great job.
    I really loved what you had to say, and more than that, how you presented it.
    Too cool!

  10. Hello! I know this is kinda off topic but I was wondering if you knew where I could
    locate a captcha plugin for my comment form? I’m using
    the same blog platform as yours and I’m having problems finding one?

    Thanks a lot!

  15. Hi to all, the contents present at this website are truly remarkable for people knowledge, well, keep up the good work
    fellows.

  16. Hi there would you mind sharing which blog platform you’re working with?
    I’m planning to start my own blog in the near
    future but I’m having a hard time deciding between BlogEngine/Wordpress/B2evolution and Drupal.

    The reason I ask is because your design and style
    seems different then most blogs and I’m looking for something completely unique.
    P.S Sorry for getting off-topic but I had to ask!

  18. Wow, this piece of writing is good, my younger sister
    is analyzing these kinds of things, thus I am going to let know her.

  21. Wonderful beat ! I wish to apprentice while you
    amend your website, how can i subscribe for a blog site?
    The account helped me a appropriate deal. I have been a little bit familiar of this your broadcast provided bright
    clear idea

  22. Oh my goodness! Amazing article dude! Thanks,
    However I am having issues with your RSS. I don’t know the
    reason why I cannot join it. Is there anybody else having identical RSS issues?
    Anyone that knows the solution will you kindly respond?
    Thanx!!

  25. Hello, i think that i saw you visited my weblog so i came to “return the
    favor”.I’m trying to find things to enhance my site!I suppose its ok to use some
    of your ideas!!

  28. My brother suggested I might like this web site.
    He was once totally right. This put up actually made my day.
    You can not imagine simply how a lot time I had spent for this
    info! Thanks!

  32. Awesome blog! Do you have any hints for aspiring writers?
    I’m planning to start my own website soon but I’m a little lost on everything.
    Would you advise starting with a free platform like WordPress or go for
    a paid option? There are so many choices out there that I’m totally overwhelmed ..
    Any ideas? Thanks a lot!

  40. I was very happy to find this page. I want to to thank
    you for your time for this fantastic read!!
    I definitely enjoyed every bit of it and I have you bookmarked to
    check out new stuff in your web site.

  42. Hi, I do believe this is a great blog. I stumbledupon it 😉 I may come
    back once again since I saved as a favorite it.
    Money and freedom is the greatest way to change, may you be rich and continue
    to help others.

  48. Howdy I am so grateful I found your blog, I really found
    you by accident, while I was looking on Digg for something else, Nonetheless I am here now and would just like to say many thanks for a tremendous post and
    a all round thrilling blog (I also love the theme/design),
    I don’t have time to go through it all at the minute but I have saved it and also
    included your RSS feeds, so when I have time I will be back to read a lot more, Please do keep up the superb
    job.

  49. Pretty nice post. I just stumbled upon your blog and wanted to say that I’ve truly enjoyed surfing around your blog posts.
    After all I’ll be subscribing to your rss feed and
    I hope you write again very soon!

  50. whoah this blog is magnificent i like reading your articles.
    Keep up the great work! You already know, lots of people are hunting around for this information, you could aid them greatly.

Comments are closed.