I've mentioned that I have sold some stocks and mutual funds recently-- here is the detail.
|Shares||Gain/ Loss||ROI||Months Held||Annual Return*|
|Toqueville Int'l Value||171.585||$444||18%||13||17%|
|Bridgeway Small Cap||100.000||$1,211||145%||40||43%|
|Royce Total Return||150.000||$838||69%||39||21%|
|Royce Value Plus||319.149||$1,451||48%||21||27%|
*My "annual" figure is just the overall return divided by the number of years the security was held. I think a true average annualized return calculation should factor in compounding somehow, but if I ever knew how to do that math, I've now forgotten! And though I could have plugged some numbers into an FV calculation in Excel to see what interest rate produced the same gain in the same time period, I didn't feel like doing that for all 7 securities-- sorry, but in addition to being stupid, I'm lazy. So the real annual number should be lower. However, the simplified version I've done here is a good enough apples-to-apples way to compare the various investments. In terms of overall gains, the Bridgeway fund would seem to beat Icon Energy, but when you take into account how long I've held them, Icon is ahead. I suspect it will continue to do well for a while, so I only sold part of my holdings.
I feel pretty good about my first few years playing around with E*Trade-- for what I just cashed out, I invested $11,639 and my total gain was $4,582, for a 39% overall ROI (I'm not taking taxes into account). If I had had $11,639 in a savings account for, say, 3 years, it would have had to earn over 11% annual interest to result in the same ROI. Considering the S&P500's average annual return since 2001 was only 2.2%, I'm rather proud of myself!
I don't have any brilliant tips on how to pick stocks or mutual funds, and obviously the GM experience was proof that things can go wrong. I tried to keep in mind some basic guidelines about P/E ratios and mutual fund expense ratios. I tried to balance my portfolio a bit in terms of large cap, small cap, etc. In the case of the Icon Energy fund, I made a conscious decision to buy in that area when it seemed like oil prices were starting to skyrocket. And I actually kind of disobeyed a fundamental rule of investing by sort of "timing the market," in that I consciously decided to invest more in the stock market in late 2002 and early 2003 when the market was in a slump, and I benefited from the recovery and uptrend since 2003. I may just have been lucky to do as well as I did, but I do think stocks and mutual funds are worth the risks, especially for younger people with plenty of time to let their money grow. I used to worry about those risks, and had too much of my savings and retirement portfolio in conservative investments-- this may have helped me ride out some downturns when other people had huge losses, but it was not a good long term strategy. Now that I've gotten my feet wet, I'd like to continue to learn more about other kinds of investments, such as ETFs. I still have stocks and mutual funds worth about $15,000 in my E*Trade account, and when things settle down after buying the condo, I'll go back to trying to add to that portfolio.
All the usual "this is not investment advice" caveats apply!