Since 2016, my portfolio has returned 140% per year versus the S&P's 44%. These annualized returns have been calculated by Interactive Brokers on a "Money Weighted" basis to take account not only of stock selection decisions but also the timing of cash flows into and out of the market. Interactive Brokers describes the calculation as follows:
Money weighted return is used when you are trying to measure the performance experienced by an investor. It is a way to measure the return of a portfolio over a specified time period. The return is influenced by the time of decisions to deposit or withdraw funds from the portfolio, as well as the decisions made by the portfolio manager. MWR takes into consideration not only the amount of the cash flow but also the timing of the cash flow.
It is not all one traffic. You can see from the table above that over a 3 year period, the S&P beat me.
And I can not claim to be a market timing guru - a lot of it cash flows in and out came down to my gut feel of preferring to buy real estate at certain times, or my addiction to investing in my small business. Other times it was paying for kids private college fees and tax bills. The amount invested has ranged from almost nothing to 7 figures depending on what our needs were elsewhere.
Nevertheless I am proud of the 143% annualized return since 2016. The graph from Interactive Brokers showing the cumulative effect looks insane:
Be warned, I may never be able to repeat this performance again in the future. I often tell people when we were born my brother and sister got the brains and good looks - I had to settle for a triple helping on dumb luck. So beware !!!
I also have the ability to grit my teeth and hang on through some truly gut wrenching rides till I am ready to sell. You may think you do as well, but trust me - few people do in real life.
I was hesitant to share this performance information with you - but I see so many blogs out there touting one stock or another and I have no idea of how good that investor has been at investing in the past. Of course none of us can predict the future.
So take what is written on this site at your own risk. If I buy, hold, or sell particular stocks, it is because I believe it is right for me at that time. Depending on Mr. Market or life in general, I may make a different decision tomorrow. You need to make decisions based on what is best for you in your circumstances. So do your own research and consult your professional advisers before you pay any attention to what is written on this site.