Performance

Here comes the $1,000,000 question.

How much money could we make?

A lot of investors and traders will state their performance objectives in percentage terms, or relative to the performance of global indices. However, they fail to take into account that the fluctuations of the markets are not within their control. Here, we take a more stoical view, but that doesn’t mean we can’t be optimistic!

Track Record & Outlook

The @bwoodinv portfolio on eToro has performed exceptionally well over the last two years, returning 24.3% in 2020 and 74.6% in 2021. Based on the eToro performance charts, $10,000 invested in the portfolio in January 2020 would be worth $21,000 two years later.

By comparison, the S&P 500 (the benchmark index of the top 500 US listed companies by market size) returned around 18.4% and 28.7%, respectively. On average, the stock market as a whole has, historically speaking, returned somewhere around 8-10% (annualized average).

So yes, we are out-performing the market over the last two years. The other critical point is the consistency of the gains. Unlike other charts you might see, the chart of our portfolio is very consistently trending upwards. Why is this?

It is important to point out that these gains have not resulted from risk-taking behaviour. The nature of a value investing strategy is to drive potentially conservative, yet consistent gains over time. This is because the strategy avoids highly volatile stocks and asset classes that, whilst offering the possibility of very large gains, can also cause huge draw-downs when the market is reacting badly to sentiment.

But what of the future? Over the last few years the stock market has benefited from a tailwind. Most indices have risen, and a rising tide lifts all boats. So, we must not be complacent. However, the weighting towards banking and real estate could offer some protection against rising inflation.

We believe the outlook for the coming year is generally positive for the portfolio.