My 2024 Investment Performance Review
How my portfolio did in 2024
2024 has been a good year for the stock market.
You would’ve likely made money if you’ve bought into the trending stocks like Nvidia.
As far as I can recall, the only easier time to make money in the stock market was during the Covid pandemic in 2021.
When it looks like the stock market can only go up, it’s a sign that the market top is near and investors should tread cautiously.
While many investors recorded triple digit percentage returns, I’m happy getting a 49% return.
This is my highest return since I started my investment journey in 2017.
My learnings from 2024
If there’re only 3 lessons I learnt from achieving these returns, it would be these.
Lesson #1 - Valuation matters
A stock is more than a ticker symbol.
It is a business that generates revenue by creating value for its customers.
When value is created, profits naturally follow.
That’s why knowing what the intrinsic value of a business is so crucial to investment success.
This is how we know when a stock is selling at a discount and gobble them up when it goes on sale.
It’s no different from a physical item that we buy in our daily lives.
We only know something is on sale when we know what it’s worth.
Lesson #2 - Buying in stages
Just cause the stock price of a great business drops below its intrinsic value, it doesn’t mean we go all in.
How many times have we encountered a situation where we buy the dip, and the stock price just continues to dip further?
Buying in stages solves this problem.
Once we have allocated a certain sum to invest in a stock, we can set multiple price levels at which we can buy.
Here’s one example for what I’ve done with Amazon (AMZN).
Lesson #3 - Patience
Patience is a muscle that has to be trained.
In investing, patience can make or break whether we succeed or not.
It’s hard not to buy a stock when everyone is buying and the stock price is rising.
In the same vein, it’s hard to pull the trigger to buy a stock when everyone is selling and there’s so much negativity around it.
Practising yoga has helped me become more patient and less reactive to external stimuli.
Conclusion
While 2024 has been a good year, not every year will be like this one.
We shouldn’t rest on our laurels assuming that these returns will repeat itself year-after-year.
As long as we invest well and consistently, the returns will come.