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. Excellent goods from you, man. I’ve take into accout
    your stuff prior to and you are simply extremely magnificent.
    I really like what you’ve got right here, certainly like what you
    are saying and the way in which in which you assert it. You are making it entertaining and you still take care of
    to keep it smart. I cant wait to learn far more from
    you. This is actually a tremendous web site.

  3. Ahaa, its fastidious dialogue concerning this post at this place
    at this website, I have read all that, so now me also
    commenting here.

  5. magnificent publish, very informative. I’m wondering why
    the opposite experts of this sector do not realize this.

    You must continue your writing. I’m confident, you have a huge readers’
    base already!

  9. รับชมกันแบบฟรีๆ ไม่เสียค่าใช้จ่าย
    โดยเฉพาะการดูหนังใหม่ชนโรง
    หนังที่มีคะแนนเรตติ้งสูงจาก IMDB และ Netflix ท่านจะได้รบชมหนังใหม่ก่อนใครได้จากที่นี้ ซึ่งเราจะมีการปรับปรุงเว็บไซต์และระบบการดูหนังของเราให้ดียิ่งขึ้นให้เหมาะกับการเข้ารับชมของคนจำนวนมาก ด้วยความคมชัดระดับ HD ตั้งแต่ 360px, 480px, 720px และ 1080px
    ไปจนถึงความคมชัด 4K หรือ Ultra HD

  10. certainly like your website but you need to check the spelling on quite a few of your posts.
    A number of them are rife with spelling problems and I to
    find it very troublesome to inform the truth on the other hand I’ll certainly come back
    again. delta 8 thc vape manufacturer

    Review my website: 510 cartridges alibaba – wholesalers.evlla.com –

  13. I have been browsinng online more han 4 hours
    today, yyet I never found any intwresting article
    like yours. It’s pretty worth enokugh for me. In my opinion,
    if all site owners and bloggers made good content as you
    did, the net will be much more useful than ever before.

  17. Hi there, for all time i used to check website posts here in the
    early hours in the dawn, for the reason that i love to gain knowledge of more and more.

  19. Definitely believe that which you said. Your favorite justification appeared to be
    on the web the easiest thing to be aware of. I say to you, I certainly get irked while people
    consider worries that they just do not know about.
    You managed to hit the nail upon the top and also defined out the
    whole thing without having side-effects , people could take a signal.

    Will likely be back to get more. Thanks

  21. Aw, this was a very good post. Taking a few minutes and actual effort to
    produce a really good article… but what can I say… I put things
    off a whole lot and don’t seem to get nearly anything done.

  22. I really like your blog.. very nice colors & theme.

    Did you make this website yourself or did you hire someone to do it for you?
    Plz reply as I’m looking to construct my own blog
    and would like to find out where u got this from. thanks a lot

  23. I’m not sure exactly why but this site is loading extremely slow for me.
    Is anyone else having this issue or is it a issue on my end?
    I’ll check back later and see if the problem still exists.

  25. Wonderful work! That is the type of information that are supposed to be shared
    across the net. Shame on Google for now not positioning this post higher!
    Come on over and seek advice from my site . Thanks =)

  28. Fantastic goods from you, man. I’ve understand your stuff previous to and you’re just extremely magnificent.
    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 take care of to keep it sensible.
    I can not wait to read far more from you. This is really
    a great website.

  29. Hi there! Would you mind if I share your blog with my zynga group?
    There’s a lot of people that I think would really appreciate your content.
    Please let me know. Thank you

  30. Do you mind if I quote a couple of your posts as long as I provide credit and sources
    back to your blog? My website is in the exact same area of interest as yours
    and my users would certainly benefit from a lot of
    the information you present here. Please let me know if this okay
    with you. Appreciate it!

  31. I’ve been browsing online more than three hours today,
    but I by no means discovered any attention-grabbing article like yours.
    It is pretty worth enough for me. Personally,
    if all site owners and bloggers made good content as you did, the net will
    likely be much more helpful than ever before.

  32. It’s the best time to make a few plans for the future and it’s time to be
    happy. I’ve read this submit and if I may just I want
    to suggest you few interesting things or tips.
    Maybe you can write subsequent articles regarding this article.
    I desire to read even more issues approximately it!

  33. Thanks for any other fantastic post. The place else may anybody
    get that kind of information in such a perfect means of
    writing? I’ve a presentation next week, and I am at the
    search for such information.

  36. Very nice post. I just stumbled upon your blog and wanted to say that I have truly enjoyed surfing around your blog
    posts. In any case I’ll be subscribing to your rss feed and I hope you write again very soon!

  38. I like the valuable information you provide in your articles.
    I’ll bookmark your weblog and check again here regularly.
    I’m quite sure I’ll learn lots of new stuff right here!
    Best of luck for the next!

  41. فلوکستین در واقع نوعی داروی ضد افسردگی است.
    این دارو از مهارکننده های انتخابی باز جذب سرتونین در بدن به حساب می آید.
    معمولا از فلوکستین در درمان افسردگی، پنیک اتک، پرخوری عصبی و یا حتی سندروم پس از قاعدگی (PMS)
    استفاده می شود.

    پروزاک یا همان فلوکستین اولین بار در سال 1988 در ایالات متحده ظاهر شد و به یکی از داروهای ضد افسردگی که به طور
    گسترده در این کشور تجویز می شد تبدیل شد.
    اگرچه داروهای جدیدتری مانند سرترالین
    و سیتالوپرام اکنون در دسترس هستند اما این دارو
    همچنان در بین افراد در معرض اختلالات و تنش های روحی
    بسیار محبوب است.

    فلوکستین دارویی تجویزی است. به شکل‌های کپسول، کپسول
    با تأخیر در انتشار، قرص و محلول در بازار
    موجود است. همه اشکال از طریق
    بلع مصرف می‌شوند. (کپسول تأخیر در انتشار در بدن شما کندتر منتشر می‌شود.) کپسول خوراکی فلوکستین به صورت
    داروهای با نام تجاری Prozac و Prozac Weekly نیز موجود
    است. به عنوان داروی عمومی‌نیز در
    بازار موجود است. داروهای عمومی‌معمولاً قیمت کمتری
    نسبت به نسخه‌های مارک دار
    دارند.

    Here is my blog post: فلوکستین

  42. Heya i’m for the first time here. I found this board and I find It
    truly useful & it helped me out much. I hope to give something
    back and help others like you helped me.

  44. Heya! I just wanted to ask if you ever have any issues with hackers?
    My last blog (wordpress) was hacked and I ended up losing months
    of hard work due to no back up. Do you have any solutions to
    stop hackers?

  45. My family every time say that I am killing my time here at
    web, however I know I am getting familiarity daily by reading such pleasant posts.

  47. I’m not that much of a internet reader to be honest but your sites really nice,
    keep it up! I’ll go ahead and bookmark your site to come back
    later on. Cheers

  49. Thanks on your marvelous posting! I actually enjoyed reading
    it, you could be a great author. I will make certain to bookmark your blog and definitely will
    come back at some point. I want to encourage yourself to continue your great work, have a nice evening!

Comments are closed.