Be a Winner, Not a Loser

By: EBS Invests 

Wow, what a great year it has been! For this month’s edition, I will discuss my personal portfolio performance as well as provide additional talking points about avoiding media buzz on markets. Below is a photo from one of my favorite investing gurus. It’s a nice infographic showing that even the biggest banks in the world expected the markets to have negative or low-margin growth, but they were wrong. As investors, we cannot let the news affect our investing. People who sold their assets in 2022 because they saw the market in the red but failed to buy back are the real losers of this market.

As investors, you must always stay on course. Keep buying high-quality companies with large moats. Keep buying the Standard & Poor’s 500 Index (S&P 500); that is the only way to guarantee yourself your fair share of the market rewards. Furthermore, don’t listen to losers; never listen to people who try to time the market—they’re wrong. Even in the United States' worst financial crisis in 2008, when the S&P 500 plunged 48% and panic was on the streets, the market still recovered. To put that into perspective, the S&P 500 is up some ~550% since the 2008 crash. However, when everything around us seems to be crashing, stay the course—buy high-quality assets and never look back. Only you can control your future.

End-of-Year Performance Review

By: EBS Invests 

Brokerage Account:

As investors, we must check our performance every once in a while. It is important to see if you’re beating the S&P 500, which is the standard benchmark used when judging stock market returns.

I have two portfolios: a brokerage account that started when I was 17 and a Roth IRA that I started when I turned 18.

Starting with my broker account, which is my largest, sitting at $7,150 market value, up $3,890 in one year. Dividends received in this account were $108, up from $44 in 2022.

My broker account had a 1-year performance of 29.12%, 5.52% above the aggressive benchmark. I beat the S&P 500 by ~60 basis points, propelling my account to have a total unrealized gain of 11.3%, or $721. It's been a very good year for this account, and it’s always fun to beat the market—at least that’s the goal of this portfolio.

Roth IRA:

My Roth is designed to be as simple as possible. The portfolio is 70% market-based indexed ETF funds and 30% individual stocks invested between 6 positions. In total, this portfolio has only 10 positions, with one new addition that I will discuss in January’s newsletter.

The Roth currently stands at a value of $3,200, up $2,200 in a year. Dividends received in this account totaled $31, up from $9 last year.

My Roth blew my broker's performance by a solid margin, and I am honestly extremely satisfied with the portfolio’s performance. I attribute it to the fact that it’s ultra simple and S&P 500-based; you can’t lose to the market if you own it.

One-year performance for this account was 34.56% compared to the S&P’s 28.55% gain. Beating the market by ~6% and my brokerage account by ~5.4%.

Thus, with the great performance in my Roth, my account ended the year with an unrealized gain of 16%, or $442.

Between both accounts, I have a blended gain of $1,163, which is awesome to have at such a young age. I'm personally ecstatic that I never listened to people who told me to time the markets or encouraged me to buy hype stocks. I have always lived by the investing thesis of buying high-quality and getting high-quality results. If you buy trash, you get trash results.

In 2022, I was down some $700 combined; it was tough to see all the money I had worked so hard to get lost on paper. However, I stayed the course and kept buying. I was not scared, and I kept the thesis going. My grandpa would always say it’s “just paper money.”

Best and Worst Performers:

I don’t want to list my entire portfolio; that would take up too much space. I will just share my top 5 gainers and top 5 losers.

Gainers:

+81% // Lam Research Corp (LRCX)

+73% // Meta Platforms Inc (META)

+49% // JPMorgan Chase & Co (JPM)

+48% // Microsoft Corp. (MSFT)

+37% // Apple Inc (AAPL)

Losers:

-71% // Frontier Lithium (LITOF)

-27% // Albemarle Corp (ALB)

-21% // Sibyane Stillwater Limited (SBSW)

-9% // T.Rowe Price Group (TROW)

-8% // Rio Tinto Group (RIO)

Plan and Goals for 2024

I have come to the realization recently that I need to focus more on just buying the market—S&P 500 funds like SCHX, SCHD, and SCHG. I also want to simplify my brokerage account. I plan to sell out most of my mining stocks besides LITOF and ALB. Those, I think, still have a spot in my portfolio. I recently cut TGT stock; I will detail more in the next newsletter. However, I decided that TGT had no moat, a low-profit margin, and lost a lot of loyalty due to their political compromises in 2023. I also plan to cut JNJ; I just don’t fully understand what they do. Plus, I am a big believer in what Warren Buffett says about avoiding companies with high research and development costs (R&D).

In short, I will be cutting either low-profit, low-moat businesses or companies that have too much R&D spending. I personally just want to own boring, highly profitable, high-moat, high-quality stocks and funds. I should not be concerned with how a stock will perform; I just want to buy and forget. My favorite stock, AXP, is the exact example of what I want to own. It has an extreme moat, great revenue, and dividend growth, and is an extremely high-quality business. It doesn’t try to reinvent the wheel; it is the wheel.

I have not fully decided on what dollar amount I want to invest by this time next year. This year’s goal was $11k, and I beat that goal with a combined value of $12.2k (including 2 other accounts not listed). Looking forward, I will graduate college in the spring of 2026, and my goal is to have a net worth of $50k. Currently, I’m worth nearly $19k. I would like my net worth this time next year to be in the neighborhood of $30k. I feel that is a respectful goal to have and growing my investments to $16k total blended.

Investors need to have goals; without them, we are investing for no reason. Make sure to justify your opportunity cost and use these goals as motivators for you to reach your goals!

Dividend Grand Total (Broker, Roth, Money Market, and IBM),2023

Dividends:

• Brokerage Account: $108

• Roth IRA: $31

• Money Market Fund: $176

• IBM: $132

  Total in period (1/1/23-12/31/23): $447

  Y/Y growth of $297 or 198%!

Update on Life

For those who have read this far, thank you. This spring semester, I will be abroad from mid-January to late May. I will be studying abroad in Europe. I will try my hardest to keep the newsletter going, but I am aware that it may be hard for me to produce content. Regardless, I will do my best.

Want to Read Past Editions? Click Below:

https://ebsinvestments.beehiiv.com/

Have a question or comment? Email me:

[email protected]

//See you in the next edition

EBS Invests 2023//

NOT A FINANCIAL ADVISOR.

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