After the first month of 2020, it’s time to reflect a bit on what the 2019 stock market brought us. The S&P index returned 30.43% purely on price. If you include the dividend into the year end calculation, the S&P index returned a whopping 33.07%. You could have done nothing, put all of your assets in equities and done very well with just the S&P.
Last year as an enthusiast investor, I discovered a service that makes it easy to understand key performance indicators of stocks through Simplywall.st. The service is not terrible in terms of cost. At roughly over $100, it gives you a solid resource to help your investing moves without having to do all of the math yourself. With using Simplywall.st, I ended up loading two of my portfolios by myself rather than connecting it. This misstep caused me not to update it throughout the year, which taught me valuable lessons about investing.
Lesson 1: Stick With Your Investments
If I look at one of my portfolios, I added Apple stock (AAPL), JPMorgan Chase (JPM), Walt Disney (DIS), and Blackberry (BB). The year returns from Apple was the highest at nearly 70% followed by JPMorgan at nearly 30%, and Disney at 25%. Blackberry, the only company that I stuck with is down 44% from one year ago.
All of the top three performers, I sold when the news was at peak negativity and when I locked in short gains. I was too short sighted on the best performers. This marked the first lesson I learned from loading my portfolios, I should have stuck with my investments and not bailed so early.
Lesson 2: Pick Quality Companies
So I missed on Blackberry specifically, but I am a biased investor with this particular company because I believe in the long term viability of their B2C to B2B transformation leveraging their core competency in security. Putting BB aside, Apple, Disney, & JPMorgan are all quality companies. Investors like Gene Munster at Loop Ventures are calling for Apple to reach a $400 target in the not so distant future. Disney just released Disney+ in 2019 and it is already off to a great start. The quarterly report will be released tomorrow and we will find out more about their recent streaming service launch. Last, but not least, JPMorgan’s performance has been ~145% higher in the last five years. Clearly another top performer that I let go of too early. My second lesson learned was that I should have stuck with quality companies through the negative news cycles.
Lesson 3: Pay Attention To The People Around You
2019 was an interesting year in terms of the economy. Many analysts focused on recession, recession, recession and yet in 2020, the analysts are not even speaking about a recession any longer. Reminds me of Russian Collusion… okay, okay, I won’t go there. In all seriousness, 2019 was the year of the consumer. The consumer held up the US economy and kept confidence higher. Next time Apple releases a new phone or a new wearable; pay attention to the people around you. Did they get the new model? Did the Apple AirPods Pro sell out? Are your friends buying a new car? How are people spending their money? Lesson number three is be aware of your surroundings and pay attention to what people are doing with their money.
Lesson 4: There Are Tools Available
As I mentioned above, Simplywall.st is a great tool for average investors. You can download the Robinhood app on your phone, get a free stock, and see how it all works. If you are not into the new age apps or services, get on the phone and call a financial advisor to manage your money. Either way that you decide choose, use my 2019 lessons learned to your advantage. Stick to the long term good companies, don’t be so short sighted, look at the big picture of those around you, and look for opportunities to start investing to grow your wealth!