My Financial Journey

I’ve started become more aware of how good my investment performance has been of late, but one thing that kind of solidified it for me was not only comparing my performance against the SP500, but then also looking at my investment returns in actual dollar figures. I don’t know why but while I think its cool to have great investment returns and see my nestegg grow by so much each month, I really wasn’t all that blown away by what was happening. Then for some reason I decided to break down my investment returns in actual dollar amounts and for whatever reason kind of blew me away.

This was money that I got and didn’t have to work for (well technically). I mean its the whole point of investing and you are probably thinking “no kidding you idiot – that’s why you invest”, but sort of like a kid who can’t understand why if they take the money they got from their grandparents for their birthday and put in the bank the bank will give them more money for what appears to be no good reason – its almost magical. Well this is sort of how I view how much money I’ve made in the market for just taking some money, not spending it, and throwing it into the stock market.

Here are my $$ returns each year I have been investing.

2006 – $3,603.49
2007 – $2,576.67
2008 – $(35,108.72)
2009 – $22,455.55
2010 – $32,127.00
2011 YTD – $20,737.30

Total money made in stock market in career – $46,391.29

Total money made in last 28 months – $75,319.85

So as you can see of my current $193,285 nestegg 24% of that has come from investment returns or basically money that just fell out of the sky and into my account.

Now granted I sort of cherry picked the dates, but I have been on an absolute tear the last 2+ years have during that time have made over $75,000 in the stock market and in just the first four months of this year I have made over $20,000 or in other words over $5,000 a month.

This to me is what really opened my eyes and was like holy crap – thats a lot of money for really no work and while its not consistent at all and I could just as easily lose $75,000 in next eight months, I’m currently making enough money in my retirement accounts that in theory I could pay my mortgage, take care of my family of five, and still have quite a bit of money left over all for doing next to nothing. The best part about all of this is I am still very young and just getting started. Again I know this is not eye opening revelation for most people and I certainly am not counting on this kind of performance going forward, but it really was eye opening for me to see the power of compounding/great investment returns/ and passive income.

Going forward I think I am actually going to keep track of that value just like I do my total nestegg, because long term thats where the majority of my money is going to come from and like I said for whatever reason it was kind of an eye opener for me.

Below are the top 5 stocks that I owned for the entire year in 2010 and their performance during the entire calendar year

Netflix (NFLX) +218%
Chipotle Mexican Grill (CMG) + 141%
Under Armor (UA) + 101%
IPG Photonics Corporation (IPGP) + 89%
Whole Foods Market (WFMI) + 84%

Obviously Netflix had a tremendous year, but I had three stocks that at least doubled in 2010 and two others that were really close. I actually had another handful of stocks that were up 60-70% – like I’ve mentioned before the stock market returns were really remarkable this year and last year. Of the 5 stocks above I sold 25% of my shares in Netflix and the other 4 I have not sold and do not plan no selling anytime within the next 5+ years.

and now my worst 3 for 2010

Headwaters (HW) -29%
Mindray Medical (MR) -22%
Otter Tail Corporation (OTTR) -9%

I would have included 5 for my worst but those were the only three that I could find that were in the red for the year. Ironically Headwaters and Mindray were already my two smallest holdings going into the year. I only bought $100 worth of Mindray during the big downturn and am still up 65% on it. Headwaters was one of my first individual stock picks that I found on my own and am down 85% on it and just keep it around to remind me to do research on my stocks before investing in them 🙂

Otter Tail is a diversified holding company that does have a renewable energy unit and those stocks have been hit harder this year I am not worried about its long term prospects and the -9% doesn’t include the 5.24% it paid out in dividends this year.

What a fluky year I really expected to be able to find more stocks that were down for the year – must have missed one or two but couldn’t find any others on my list. I doubt I will ever have to many years like this again.

Back in March of this year I listed my top 15 investments for the first time. I figured this time around I might as well list my entire portfolio and what percentage of the portfolio each investment takes up. I figure this might be useful for me to look back on in the future and occasionally I will get a comment or an email asking what I am invested in (especially since I have been beating the market lately)

A couple comments about what’s happened since I put out my last list. #1 Netflix completely exploded. It became my first 10 bagger and despite the recent pullback and me selling $2400 worth of stock when it hit $200 a share it is still my largest individual stock investment despite me only putting $1000 into the stock.

The second thing would be that I sold some of my stocks and have 4.59% of my retirement nestegg in cash trying to time the market kind of. Because the market has been on such an incredible tare and because some of my stocks like Netflix have very lofty PEs and because I am not planning on putting a boatload of new money into the market until we figure out what we are doing with the house I thought it would be to sell small portions of some of the stocks that really ran up so I would have some money on the sidelines to take advantage of a stock market pullback should one occur. So far this has been a really bad decision and of the stocks I have sold only Netflix has pulled back – the rest have continued their journey upward. I am not too concerned about this as even in the case of Netflix I sold only 1/4th of my position and overall this cash on the sidelines is not hurting me too much. Whether or not I will be able to redeploy it at better values will be a learning lesson for me.

Anyway here is the list 57 total investments, 4 mutual funds, 52 stocks, and a cash position.