Big swings in Q3.
We experienced the worst days for stocks since March 16, 2020 in August this year with over $2.9 trillion wiped from major indices and stocks due to growing fears of a global recession. We saw Nikkei logs the worst day since the 1987 Black Monday crash.
But we also see the Dow and S&P 500 closing at record highs after the Federal Reserve's supersized rate cuts. And we also see the astronomical climb in China stocks after the fiscal stimulus by the Chinese government.
All of these happen in a single quarter.
If anyone tells you that he/she sees it coming, it is all bullshit. This is why time in the market beats timing the market anytime.
Here is an overview of my portfolio's performance.
2024 Performance YTD
My Portfolio: 23.15%
Vanguard 500 Index: 21.95%
Performance since inception (Jan 2021)
My Portfolio: 46.7%
Vanguard 500 Index: 60.6%
(Based on an arbitrary starting amount of $10,000)
All 3 months in Q3 are positive months for my portfolio. Even as we have the worst day for the stock market in August, I still have a positive return in August. This goes to show you how fast the swings are in the market.
The strong growth in Q3 now propels my CAGR since Jan 2021 to be 10%. I am absolutely happy with such returns. Almost 4 years of 10% return annually is certainly a good way to compound your portfolio. With another quarter to go, my CAGR might even go up to be 12% and above. Even if I were to account for inflation, my real rate of return will still be around 7% annually. A respectable figure, I presume.
I still have not beat the market after almost 4 years of data. The gap is closing up by the end of Q1 but widened a little in Q2 and Q3. If Bitcoin were to surge in Q4, I am pretty positive that my portfolio will beat the market then.
For an overview of the YTD performance of the constituents in my portfolio, refer to the below table.
It's interesting to note that most of my predictions for Q3 in Q2 review didn't happen as expected. I wasn't expecting a good return in Q3 but Q3 turns out to be pretty good. I was pessimistic about the performance of China stocks in Q3 but they had a huge jump in the last week of the quarter. I was expecting a decline in Bitcoin's prices in Q3 but it was better than expected. You really can't predict the market performance in the short term.
While most of these things do not happen as intended, my long term investment thesis stays intact. I still don't intend to increase my stake in the China market as I remain cautious or even pessimistic on its long term performance. I still believe that Bitcoin will be the best asset anyone can hold in our era. And I still believe in holding a majority of my portfolio in ETFs/stocks like World ETF and Berkshire Hathaway.
So far, Bitcoin remains to be the best performer in my portfolio for 2024 with the China stocks in second place. ARK ETFs remain to be disappointing with a negative return YTD. This is definitely not good news as NASDAQ has returned 22.84% YTD while the ARK ETFs are actually still in the red. Investing in these ETFs have been a costly mistake and I honestly don't know how Cathie Wood thinks that her ETFs could have a 50% CAGR based on her sharing in 2022. I should really look at further trimming my stakes in her ETFs again in 2025, even though they are already only forming just 12% of my portfolio.
I think Q4 will be a good quarter for the market as the U.S. election results could hopefully further propel the market. Hopefully I don't jinx it.
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