2009 Performance

Reviewing my 2009 stock return and it was a great year for the markets and for me. As they say, a monkey throwing darts at a stock page will do well in a bull market, but I was able to beat the SP500 by a decent percentage. In 2009 the SP500 returned 23.5%. I was up 40.7%.  The goal is to have this kind of return against the index every year.  Most investors fail to beat the market over the long term, and most investment strategies fail to beat the market.

The headlines say that from 2000-2009, investors did poorly.  But here is a great column from the NY Times that suggests otherwise.

For Savers, It was Hardly a Lost Decade 

If you invested $100,000 on Jan. 1, 2000, in the Vanguard index fund that tracks the Standard & Poor’s 500, you would have ended up with $89,072 by mid-December of 2009. Adjust that for inflation by putting it in January 2000 dollars and you’re left with $69,114.

But that is not how most real people invest. They don’t pour everything they have into just one type of asset and then add nothing to it for 10 years. Instead, they buy stocks of all sorts, and bonds and perhaps other things, too. And many millions of them dutifully add more money regularly, usually into a retirement account that they won’t touch for longer than a decade.

For those people, it was not a lost decade at all. Even those who started with a low six-figure balance could have doubled their total savings in the last 10 years.

How?

Well!  I left a cliffhanger!  But the answer is diversification and steady dollar-cost investing month after month. Read the link and realize that nobody every invested all their money at the exact top or exact bottom.  It's a long journey that requires dedication, patience, and sometimes, looking the other way.