Six months into investing: I'm outperforming the S&P 500.
My investing strategy to meant to build long term value, but seeing short term gains is still nice.
When I launched into this investing journey six months ago, one of my goals was to learn about financial markets by investing in them.
I’ve done that and it’s been quite a ride.
From the beginning of this journey, my goal has always been to invest in order to build wealth for the long term. But achieving short term wins has been nice too.
The price of my investments (not included employer-backed mutual funds) went up by 9.5 percent over the past six months. The S&P 500 lost nearly 4.5 percent over the same period. Boom!
My Vanguard High Dividend Yield EFT went up more than 5.5 percent in price.
My Bitcoin went up 11.5 percent in price.
My Apple stock went up nearly 18 percent in price.
My Rocket Companies stock was the only loser, going down about 4 percent in price.
Now, if I liquidated all of my assets today, I would only make about $63. And that’s before short term capital gains taxes and penalties for withdrawing funds from a Roth IRA without a qualifying event.
But I still consider this a win for this reason: I achieved a high rate of return. As I begin investing, the important thing isn’t the U.S. dollar price of the assets in the portfolio at first, it’s the rate of return allowing me to build my portfolio at a faster rate, so I can reap the benefits of compound interest.
And my investments faced major head winds as both the U.S. stock market and Bitcoin have gone down in price over the past six months.
In 2022, the S&P 500 (which is an index of the top 500 publicly traded companies in the U.S.) went down nearly 20 percent in price. And while the S&P has gained back nearly 9.5 percent in so far this year, it has been a challenging time to invest in the stock market.
Moreover, the price of Bitcoin has also gone down over the past six months, losing more than 10 percent of its value in U.S. dollars.
I feel pretty good six months into this — hopefully the next six months don’t wipe my smile away.
In this newsletter, Evan Invests, I explore the world of investing from the perspective of the everyday investor by making small investments every month. Follow along with me as I look to grow my wealth through wise money management and making investments in cryptocurrency, index funds, stocks and more.
But before continuing to analyze my first six months of investing, let’s take a quick look at how my portfolio has been performing in the past week.
My Portfolio Holdings as of 2/10/23
Apple stock
Rocket Companies stock
Bitcoin
Fidelity 500 Index Fund
Invesco International Small-Mid Company Fund Class R6
Vanguard High Dividend Yield ETF
Vanguard International Dividend Appreciation Index Fund Admiral Shares
Vanguard Mid-Cap Growth Index Fund Admiral Shares
My portfolio lost value last week as the stock market continues to deal with uncertainty.
But as I look back over the past week, and continue to ponder my last six months of investing, I’m thankful for the lessons I’ve learned by dollar cost average investing.
Whether my portfolio loses value in a week, or gains 9.5 percent over six months, I continue investing because I know that over time stock-based investments (and I think in the future Bitcoin) always grow.
Even as I celebrate my wins from the past six months of investment, I don’t want to get ahead of myself, or lose focus on my ultimate goal, which is to build long term wealth.
And honestly, it’s too soon to know if my investment strategies will really turn out as I planned.
Dividend investing is a long term strategy.
Bitcoin is still a relatively new asset.
Apple continues to prove itself as a market leader in consumer electronics and its stock seems to continue to grow.
And while I’m biased because I work there, I have confidence that my Rocket Companies stock will grow as well as the housing market begins to pick back up.
Reflecting back on the past six months, even with the relatively small amount I’ve invested, I would say that the biggest thing I’m learned is that its important to pick a strategy and then stick with it even while it appears like the price of the investment isn’t going in the right direction.
I’ll report back next week.
If you enjoyed this post, hit the like button and leave a comment. Thank you!
📨 Connect with me on Twitter @EvanInvests
🚀 My favorite financial tweet from the past week.
💰 I help people finance homes for a living. If you’re looking to buy or refinance, use my link to get a sweet mortgage discount from Rocket Mortgage.
📈 Inspired to begin investing yourself? Use my link to open an account on Robinhood, and we’ll both get between $5 and $200 toward a stock.