Thursday 25 December 2014

The stock portfolio development 2014

Stock portfolio, 2014, development

Since my target in the end is to reach 750 k€ invested on the stock market that will be my retirement fund I should not forget to every now and then look at the development for reaching this target.

As can be seen in the graph above it is working out very well! In my first year of investment I ended up with a stock portfolio in the value of 17,659 € which was 4,744 € more then my plan required.
In the second year my stock portfolio grew with 173 % and ended up with a value of 30,623 € which was 4,723 € above my target meaning that I managed to stay ahead of my plan but I did not manage to increase this advantage.
Now in the third year my stock portfolio grew with 157% and I ended up with a value of 48,208 € which is then 8,333 € ahead of my investment plan which means that I managed to double my advantage during 2014.

The yearly development of a stock portfolio always starts off very well due to monthly investments before it reaches a yearly growth rate that it will then not fluctuate much from and which will hopefully become more and more based on the general development of the stock market (and a little better!) if one is staying the course.

This happens when the monthly investment has little impact due to the size and the stock portfolio as such is what is generating the value increase via share price increases and paid out dividends. For me, by the look of it, this is still far away.

By different stock picking the development of my stock portfolio could have been around 8% yearly or in total 7,720 € higher today (which I have covered by an increased investment rate). One could think that it would be much more and it is of course still plenty of money but it really is not that much in the long run if the tendency is soon broken.

If we look at the graph below we see the reason for my stock portfolio development is purely coming from monthly investments made. The compound interest have not yet kicked in and neither has the share price of my companies done but I am looking forward to that happening!

Invested, versus, Current Value, 2014

Conclusion: In the beginning the most important thing is to make the monthly investments and to keep growing the stock portfolio and more importantly to expand the ownership of various companies that each day produce and sell products and services and generate money for you as a shareholder.

No comments: