It’s a pretty easy to make money in the stock market currently and has been for the last several years, and so it’s been a really good time to learn about investing. I have a Vanguard 401k, a personal account with Robinhood which I invest manually, and a new automated investing account with SoFi.
⚠️ This post is only about investments, not cash or savings. My investments are almost entirely for fun currently so don’t take any of this as investment advice.
My performance in 2019
Over 2019 performance has not been bad. I easily beat my minimum target of 6% but these numbers could & should be higher. The S&P 500 hit 28.5% and Nasdaq did better at 35%!
- Vanguard: 9%
- Robinhood: 27% in 2019
- SoFi Automated (aggressive): Too new for a percentage. (I want to see how this compares to the other two as another point of reference and will write another post in the future.)
I’m comfortable with having an aggressive stock portfolio so later last year I shifted Vanguard over to mostly stocks and have seen better performance since then. I’m more limited to specific funds with that account so it’s mostly hands off now.
As for Robinhood my strategy is going to remain similar, I think I just need to follow my own advice more often and not take as many risks on less known companies.
Robinhood from Feb 2019 to Feb 2020
The hardest part for me is picking companies. The companies that have done best for me are ones that I’m personally familiar, I’ve used their products, I know their quality, and hopefully I’ve met a few people who work there. Whereas the worst performing ones have been companies that I know by name but most of my insight is from the news rather then hands on experience.
My 5 top performers (overall)
Apple and Microsoft are obvious winners that everyone should probably own.
- AMD 349%
- Ubiquity 155%.
- Apple 101%
- Microsoft 96%
- PG&E 86%.
Ubiquity was an interesting buy because I setup one of their products and bought a few shares in the same week. I was convinced immediately using their product that they’d do well and I still feel this way.
PG&E is another interesting choice, I felt really strongly that they’d recover after the disaster they went through last year and so far that’s been true, albeit slowly over many months.
AMD was a bit of a fluke, I felt like they were really undervalued and bought at the perfect time during a dip. For PG&E and AMD I felt confident enough to invest a small sum, next time I think I’ll try a little more.
My 5 worst performers (overall)
The ones I’m most familiar with are GM and Boeing which I’ve learned more about and think they’ll turn around.
- Barclays -10%
- GM -10%
- Charles Schwab -9%
- Boeing -9%
- GE -5%
The thing I did wrong on all of these was that I didn’t really know much about the companies before buying them. I’ve only briefly used Barclays, I know whats in Charles Schwab’s portfolio, I’ve never bought a GM car or a GE appliance, and im not buying an airplane from Boeing anytime soon. So for all 5 of these I don’t have a relationship which explains why I am out of touch.
Once I’ve picked a company out I start watching it’s ticker. I rarely buy the first time I look it up, rather check several times to see how it’s performing. In general I’ll wait for a large dip which is usually the result of some bad news. My philosophy here is that companies that I’ve picked I believe can withstand controversy, if something bad happens, they’ll bounce back.
- Follow news, wait until something bad affect the stock price.
- Watch stock prices fall, follow news.
- Buy stock at a low point of ~15% or more below previous market avg when it appears to be leveling off.
- Watch stock price rise and hold until the previous high has passed. Or hold permanently.
This strategy doesn’t get any big wins since it mostly just improves on the initial purchase. But it’s worked well enough so far, and I think if I stick with better companies my rates will improve.
I’m trying options trading now as well and am following a related strategy.
At the same time I decide if I’m going to buy a stock I also do a quick analysis for how quickly I think it will bounce back. If my gut says it’ll bounce back within a few weeks I buy calls and then track things closely.
So far I’m up about 200% with this strategy and intend to only re-invest as much as I profit to limit my exposure.
Thanks for reading
If you have any comments or questions please leave a comment or reach out to me on twitter @johnspaetzel.
If you want to sign-up for Robinhood or SoFi please consider using my referral links! I use these two providers because they’ve honestly been my favorites. Besides these referral links this is not a sponsored post.