I can testify that your strategy works, and I couldn’t agree more. I think that most people, IF, and it’s a big IF, can desensitize themselves to fear, they follow your methods too. It isn’t rocket science.
My suggestion to those who have been to fearful to try, take a small amount, say 25% of your portfolio, and give this a try for a year. If you aren’t successful, it ain’t the end of the world. Whoever loves you with that 25% of your investments, will love you without that 25% of your investments.
My other suggestion would be to think of your gains as a margin of safety. The better you do, the more insulated you are… bilwnk
Whilst this could be a good starting approach, after investing for a few decades I’m not necessarily planning my portfolios in that kind of experimental way BUT I do use portfolio strategies in different places for different reasons, (opportunity landscape of the economy and the stock exchanges, availability of investor information, tax regimes and most importantly employing a companion strategy in order to produce high yielding income as an alternative to holding cash).
As a result in case it helps anyone short cut their thinking or starting approach, I can share the data on the performance of how a US based high growth stock portfolio compares with balanced and income portfolios over the years, (which feels robust enough to draw some conclusions from in terms of investing timeline and in terms of $ deployed and # of holdings).
It is also a look at tracking performance in a different way to how we typically look at our high growth investing portfolio which usually we review in terms of YTD % growth and % returns year by year. I haven’t quite made up my mind how much I want to get out of this measure, but anyhow - for what it’s worth… here goes.
As some may recall I hold a US high growth stock portfolio, a mixed growth and income portfolio in HK and a predominantly high yield dividend income portfolio in Singapore, (mostly via my SG brokerage account which is dividend and capital gains tax free).
I have kept a record of all purchases and sales over the years and whilst on occasions, (for instance when sailing around Indonesian islands), I failed to record year end stock prices to allow for calendar year % returns, I can share the performance measure of returns according to year of exit transaction. I have tabled below the average % RoI for all sales made per year of sale (irrespective of length of holding). I joined this board in 2016 and started employing a Saul like strategy in earnest from 2017.
**Portfolio 2016 2017 2018 2019 2020_YTD**
**US_(growth)**21% 44% 35% 55% 30%
**HK_(mixed)** 25% 33% 39% -5% 81%
**SG_(yield)** 14% 13% 12% 17% -25%
As it stands gains on the current holdings in my portfolios according to Yahoo are:
US - up 92%
HK - up 15%
SG - up 10%
Leaving aside the fact that this doesn’t tell the full story across exits and current holdings and doesn’t normalise for length of holding (IRR would be a better measure), differences in volatility between the markets nor considers dividends and that 2020 is work in progress given where we are at in the year and the repositioning activities during the CV-19 crisis; it clearly highlights that the high growth portfolio strategy produces consistently higher levels of absolute returns both in with regards to returns on completed transactions as well as gains within the total current value.
Anyhow - hope this was of interest and perhaps provides re-assurance for those just getting started. The purpose of this is not to take this conversation in a portfolio strategy off topic direction but to reinforce Saul’s high growth portfolio approach with some real world benchmarking performance data.
Ant