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!

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    بهترین چاره مراجعه به روانشناس است که تخصص کافی
    در این حوزه دارد و سال‌ها در این زمینه فعالیت کرده است.

    اینکه چرا باید به روانشناس مراجعه کنیم سوالی است که ممکن است برای افراد زیادی پیش بیاید.
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    مشکلات روحی هستند لازم است در صورتی که این تصور اشتباه است.

    امروزه با وجود فشار‌ها و
    استرس‌هایی که همه‌ی ما در زندگی تحمل می‌کنیم وجود شخصی که بتواند ذهن آشفته‌ی ما را به آرامش برساند
    بسیار اهمیت دارد.

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  13. در این مقاله قصد داریم به بررسی زبان
    کشورهای مختلف دنیا بپردازیم.
    بیش از ۷۱۰۰ زبان در جهان وجود دارد و در
    هر چهارده روز یک زبان تبدیل به زبان مرده
    می‌شود. از دلایل این موضوع می‌توان گرایش
    مردم به شهرهای بزرگ و همچنین فوت افراد بومی‌های آن
    زبان اشاره کرد. دانستن زبان کشورهای مختلف می‌تواند جنبه اطلاعات عمومی داشته باشد یا صرفا برای یادگیری باشد.

    با این وجود اغلب زمانی که
    تمایل به دانستن زبان یک کشور داریم، هدف مهاجرت به آن
    کشور و یادگیری زبان دوم برای مهاجرت
    است. به همین خاطر در این مقاله ابتدا زبان کشورهای مختلف را معرفی میکنیم.
    سپس کلاس‌ها و آموزشگاه‌های زبان را در شهرهای مختلف به شما معرفی می‌کنیم، تا چنانچه
    قصد مهاجرت دارید، بتوانید بهترین انتخاب را برای
    آموزش و یادگیری زبان داشته باشید.

    مهاجرت و یادگیری زبان کشور مقصد
    امروزه، با توجه به شرایط نامطلوب زندگی در ایران و رفاه و کیفیت بالای زندگی،
    مراکز آموزشی و شرایط تحصیل عالی، وضعیت اشتغال مناسب در کشورهای دیگر، بسیاری
    از افراد تصمیم به مهاجرت
    می‌گیرند. مقصد مهاجرت افراد بسته به
    اهداف، بودجه و شرایط دیگر با هم تفاوت دارد، با این حال برخی از کشورها مثل کانادا، آلمان،
    استرالیا، انگلستان، ایتالیا، آمریکا، فرانسه،

  14. در این مقاله می‌خواهیم به موضوع
    مکالمه زبان بپردازیم. تا انتها همراه
    ما باشید. همه ما دوست داریم بدانیم به چه روش هایی می‌توان به
    زبان انگلیسی صحبت کرد. برای تقویت
    مکالمه زبان انگلیسی، بهترین روش صحبت کردن
    با هم صحبت انگلیسی زبان است، اما برای بعضی از ما یک
    مانع بزرگ وجود دارد و آن نداشتن فردی است که به زبان انگلیسی با ما
    مکالکه کند. بسیاری از افراد شرایط آن را ندارند.
    پس راه حل چیست؟ در ادامه به بیان تکنیک هایی برای یادگیری
    مکالمه زبان می‌پردازیم.

    چرا مکالمه به زبان انگلیسی سخت است؟
    خیلی از اوقات ما بسیاری از
    کلمات را بلدیم و بارها تکرار کردیم، با اصول گرامری زبان آشنایی داریم، حتی اعتماد به
    نفس خوبی داریم، با این حال نمی‌توانیم به انگلیسی صحبت کنیم.

    احتمالا در ذهن خود می‌دانید که
    چه حرفی برای گفتن دارید، اما لغات مورد نظر در
    دهانتان نمی‌چرخد. در ادامه بررسی می‌کنیم که چرا
    این مهارتِ به ظاهر آسان، این‌قدر مشکل ایجاد می‌کند؟ و سپس تکنیک هایی برای یادگیری
    مکالمه زبان ارائه می‌دهیم.

  15. در این مقاله قصد داریم به معرفی روش
    ها و تکنیک های مختلف آموزش زبان انگلیسی در خانه بپردازیم.
    گرچه رفتن به کلاس زبان حس
    و حال خوبی دارد و بسیاری از افراد ترجیح می‌دهند
    زبان انگلیسی را با شرکت در کلاس زبان آموزشگاه های مختلف فرا بگیرند، با این حال ممکن است برخی افراد فرصت رفتن به کلاس زبان را نداشته باشند.
    حتی ممکن است شما فرصت داشته باشید، اما راحتی خانه را ترجیح دهید
    یا دلتان نخواهد برای یادگیری زبان زیاد هزینه کنید.

    چالشی که پیش می‌آید این
    است که چطور می‌توان بدون مدرس پیشرفت کرد؟ پس چه کسی اشتباهاتمان را اصلاح کند؟
    این نگرانی ها به‌جا هستند و شاید موارد دیگری هم باشند.
    مثلا ممکن است نگران تلفظ صحیح کلمات باشید.

    در واقع، شاید اصلا ندانید که از کجا باید شروع
    کنید. در حقیقت یادگیری زبان لزوما به معنای نشستن پای کتاب
    نیست و منابع زیادی وجود دارند که
    می توانند به شما کمک کنند که در مسیر درستی
    قدم بردارید.

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