Cherish the wins!

By: EBS Invests

First off, Merry Christmas to all my readers, and Happy New Years as well. Santa was very kind to us this year as investors, and we reaped ~25% YTD gains (as of Sun Dec 29th 2024) in the S&P 500.

It is my hope that you also saw great returns in one of the best years of the S&P 500. Further, in the past two years, the S&P has returned ~47% in appreciation to investors (excluding dividends). Which is very rare and has only been done 9 times before.

However, keep in mind that markets must always revert back to the norm. In order for the S&P to average its 9% per year, it is likely to have downcycles in the future. However, this does not mean you sell now in hopes of timing the market; as I have stated before, time in the market always wins.

In reference to the image above, keep in mind that the stock market is a “market.” If you went to your favorite store and you saw something you had been buying for the past 2 years was now 20% off, why wouldn’t you buy it at a cheaper price? Keep in mind that the markets are not always going to return 25% per year for the future, and we must stay investing no matter the current cycle of the markets. Even if the markets go down at some point in the future, stay the course and keep investing.

I do hope that everyone had a great year and your portfolios did well. Stay reading as I discuss my portfolio performance and how I stacked up against the S&P 500. I also will offer some discussion points regarding failing to meet the overall S&P 500 benchmark.

End-of-Year Performance Review (2024)

By: EBS Invests

Brokerage Account:

This year my brokerage account, which is my largest account, did okay against the S&P 500. However, I will note that I did not pay as much attention to this account. In 2024, I made less money from working, and I was more focused on funding my Roth IRA.

However, the account started in 2024 with a value of ~$7100 and ended with a value of ~$9850. I contributed $1080 to this account and currently have an unrealized gain of 24.5%, or ~$1920. Furthermore, I did make some changes in this portfolio. I made some sales and acquired a net gain of ~$200. Therefore, with the two combined, I had a YTD performance of ~23.3%. Therefore, I did okay against the market this year. However, I still fell short of beating the S&P.

The following trades were executed in this account:

I dont want to discuss the sales individually; however, I made these sales for 3 key reasons. (A) I wanted to simplify my portfolio and have fewer positions. (B) I wanted to have my brokerage account be more invested in broad-market ETFs. (C) Some of these stocks I owned, I also owned their competition, i.e., CNI, as I already owned CP.

Dividends in this account were awesome; YTD I received $154 in dividend income. Which has grown from $102 in 2023. In 2025, I hope to break $200 a year in dividends in this account.

This is currently how my portfolio looks. Im proud of where i’ve come. It was a goal of mine outlined in early 2024 to have my broker account be near 40% invested in ETFs. Currently, it sits at 38.34%. Which is an improvement from 2023 of 20%.

Regarding this account, some stocks I’m looking to increase position size in include: AXP, GOOG, AGM, JPM, META, SBSW, and QCOM. Furthermore, I aim to have SCHX be 20% of this portfolio and SCHG be 15%. I plan to add more to these positions as time goes on.

Roth IRA:

My Roth IRA was the main focus of this year. As my goal every year is to base contribute ~$2100 a year or more. This year I managed to beat that mark by $9; I know, big money. In the future, I hope to max out my Roth; however, as a college student, I can only afford to invest so much.

To be honest, I thought my Roth IRA was doing better at tracking the overall market. Last year I beat the S&P 500 in this account by 8%! However, I will discuss further below why I believe I failed to meet this mark this year.

I started 2024 with my Roth IRA being worth ~$3200 and ended 2024 with it being worth ~$6900. A increase of ~2.15x, which is awesome. I also made great use of 2 other ways in which I contruibuited. (A) My savings account, which is in a money market fund (SWVXX) and I received $220 from interest in that account. (B) $120 in cash back from my AmEx Schwab investor card (hit me up for a referral bonus). Both of those fed into my Roth IRA, which helped grow the account by an additional $340. Outstanding how different streams of income can really help increase your baseline.

Dividends in the Roth were $90, up from $28 in 2023. I am on track to easily break $100 a year in dividends in this account in 2025. Additionally, I have an unrealized gain of 21% in this account, or ~$1200.

I made momental strides in my Roth IRA; total net contributions for this account were ~$2500 and helped aid in that outstanding growth of account value.

I made no sales in this account in 2024, only purchases. My portfolio looks like the following:

Currently, I have ~77% (7% being BRK.B) of this account invested in broad market funds, the rest being equities. I think the reason why my account lagged the overall S&P 500 compared to last year, where I beat it, is from these 3 main points. (A) Large positions in AVUV and SCHD saw minimal returns YTD. (B) SCHG did not crush the S&P like it did in 2023. (C) My equites saw nominal growth compared to 2023.

I am optimistic for the future of this account. I think small caps will really take off as rates continue to get cut. Furthermore, as rates get cut, investors will look to SCHD for dividend income to help offset the loss in yield from CDs, MMs, etc. I also plan to increase my stake in SCHX to 100 shares; I think that would be a nice number.

I like the simplicity of this account; its very easy to manage, and having most of my money invested in broad-market ETFs is a great way to invest.

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As investors, we may beat the S&P 500, like I did last year, or we may miss the mark. However, I think that any investor would be happy with an average 22% performance. It is imperative to keep buying the S&P 500, as 95% of investors fail to beat it regardless.

I came to this realization a few months ago, and I think going into 2025 my focus is to load the boat on SCHX. Yes, yes, I know SCHX is not the S&P 500 and I always refer to it as the S&P. However, the fund owns 750 of the top companies, not just 500! As Schwab does not offer a S&P 500 ETF, this was the closest alternative I could find when I began investing. Some years this fund beats the S&P, and others it falls behind. Typically it ranges from +-30 pts; its very minimal difference in performance. I also like the more diversification it offers. Owning another 250 companies is nice.

Going forward as investors, don’t beat yourself down if you fail to meet the benchmark. We must know our goals and how to improve on them. I think there is a lot of value in looking at your portfolio and taking a look at what is working versus what isn’t working.

I know I plan to put more emphasis on owning SCHX and SCHG in 2025. I think there is a lot of value in those two ETFs. Im sure that 30 years from now, older me will be grateful for whatever efforts I put in today. Even if the stock market tanks and the S&P is down 50%, I will still be buying. Remember that the stock market is a market; stay the course, invest what you can, and buy the market. Also, do not get consumed with losses. At the end of the day, money is not everything.

-EBS Invests

Best and Worst Performers of the Portfolios in 2024:

Gainers:

+70% META

+61% AXP

+42% JPM

+36% IBM

+33% AAPL

Losers:

-8% CP

-8% LRCX

-37% SBSW

-39% ALB

-44% LITOF

Dividend Grand Total (Broker, Roth, Money Market, and IBM),2024

• Brokerage Account: $154

• Roth IRA: $90

• Money Market Fund: $240

• IBM: $94

  Total in period (1/1/24-12/31/24): $578

  Y/Y growth of $130 or ~29%!

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[email protected]

//See you in the next edition

EBS Invests est 2023//

NOT A FINANCIAL ADVISOR.

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