My portfolio performance 2024

Yes, it is that time of the year when I compare my portfolio’s performance with the market indexes. For reference, see 2023’s results here.

Usually, I start with my portfolio’s one-year relative performance. But then I also follow it with my oft-repeated refrain that short-term performances (like 1- or 3-year) don’t matter in the long run. So, for a change, I start this year’s post with the ten-year performance chart. This is by far the most meaningful comparison since it is long enough to suit my investing framework.

I could go back even further since I’ve been investing for 20-plus years. But going further back muddies the waters because back then I used to hold significant amount of index funds. It is only meaningful to compare my individual stock selection with the market indexes. Twenty years ago, unlike today, I was mostly a passive indexer into the S&P 500.

Here’s my ten-year performance chart versus the S&P 500 and NASDAQ indexes. As always, I let Quicken Premier measure and report the numbers here.

My rolling 10-year performance handily beat the stock market. Like last year. In fact, even though stocks did very well in 2024 (thereby improving the S&P and NASDAQ’s longer-term returns), my own performance remains about the same: 19.7% IRR

My five-year performance was also 19%, though this was a slight drop from 20% that I reported last year. It still outpaced the market easily.

Included for completeness, here are my three-year and one-year portfolio charts:

Here’s the summary table of my portfolio’s performance versus the market:

19.7% ten-year annualized growth rate for my stocks is wonderful. To tease apart individual stock performances within that number, I have Quicken calculate IRRs for each of my top 20 positions (those with biggest $ impact on my portfolio) over the last decade. See this table.

Eleven of these positions (shown in green) performed better than my portfolio average while the other nine lagged a little. Those eleven above-average performers gained more than 32% annualized for the period. My below-average performers (shown in yellow) weren’t too shabby either — their 14% average gain was still higher than the S&P 500’s 11% gain for the same period.

Take a second look at the table above. All those twenty positions did quite well, both green and yellow shaded. If there was one laggard in that group, it was the Disney (DIS) stock. Its ten-year performance was a paltry 2.7%. Though, I have no intention of getting rid of Disney from my portfolio. I continue to like the business for its long-term prospects.

Majority of these twenty positions were established over a decade ago; the oldest being Amazon (AMZN) that I initiated nearly 25 years ago. However, there were a couple of exceptions: Blackstone (BX) is seven years old and Brookfield (BN) has only been around in the portfolio for about five years. Another exception is Activision Blizzard (ATVI). I first bought ATVI in 2010, but my shares were taken away when Microsoft acquired the business in 2023. I first wrote about Activision going private in this 2022 blog post.

These twenty stocks make up nearly 90% of my stock portfolio. Of these, my top ten stocks constitute about 70% of it. Here’s a breakdown of my ten largest stock positions:

Year in and year out, I continue to have the same winners in my portfolio. I know this kind of investing can be unexciting for some. But boring can be rewarding too. As my numbers show.

I end this post with the following anecdote that David Gardner (of Motley Fool fame) shared last month on his podcast. It was a letter from a Fool subscriber who in 1990 was a young CPA, just 28 years old, and had decided to invest $15K out of his mom’s $250K inheritance in Microsoft shares. Over the years, as Microsoft stock grew quickly, he ignored advice from his well-meaning friends from the investing world to take profits off the table. He would sell some shares on occasion but felt comfortable keeping a large stake in Microsoft shares. He noted that it didn’t make sense to him to sell the stock just to try and find something better when he already owned a good thing. Today, that small initial Microsoft stake is a 500-bagger. He reports that the original investment had allowed his mom to send three grandchildren and two great grandchildren to college. Along with new cars and tractors for the family and now security for her long-term care expenses.

In my view, investing should be thought of as an infinite game, and my decade-long perspective aligns with this philosophy, underscoring the importance of patience, persistence, and a focus on long-term objectives. Ten-year analysis better captures the true impact of major stock purchases over time. Not just the timing of the buys, but also the benefits of holding on to them.