If you can’t measure it, you can’t manage it.
While the above quote is a misquote and at no point was it said quite like that, it’s still a very good quote none-the-less. If you can’t see where you came from, you can’t plan where you’re going. After all, that (along with our apposable thumbs) have allowed us to conquer the planet.
As the year comes to a close, I’m going to take a look at where I currently stand – both in regards to myself and the market as a whole. Due to the many infamous lockdowns Melbourne has endured, and the amazing job Simone has done managing our money, I have been fortunate enough to put away a lot more money than we planned! As stated before, this is helpful to build up a cushion for those times when we can’t quite make our goal.
Without fur ado, here is how I currently stand on the very last day of the year – December 31st, 2021! And there is a lot to dig into, but I’ll save that for January’s update. The long and short of it – New Zealand’s growth has stalled as the Labour Government is pushing every button in reach to try deal with the housing market, failing to manage COVID and not planning for inflation. The spending spree will continue way into 2023, and this will cause a lot of people to pull out the market as they struggle to cope with hyper-inflation and increase cost of living.
In saying that, it’s not all gloom and doom. After all – I am still up. Even if by a small 3% on average. Gone are the days of 10+ percent growth. At least for the time being. This is also very good news for those wanting to get into stocks – they will remain semi-stable for a long time. But compared to January this year, where I only had Nineteen odd thousand invested – I am now on $31,000! That is smashing my goal of $10,000 a year, considering that the $19k counted $1,500 in growth.
Also, something of note on this above chart – I have not added any of the shares from my reinvestment plans I am part of. If I did, I would be up around the 4% mark, but lets keep it simple for now.
For those of you who prefer visual representation. You can see each sharp jump when I have invested in more stocks. You can even see the market downturn after each buy. While I didn’t expect this, I am not surprised. I fully expected a full Labour government to slow the growth of the market, and I think I have taken advantage of it.
In saying that, I am sure there are many other factors which I don’t know about…
Now let us compare my growth compared to the market over the same period. We can see that the S&P (or entire market) is down 1.82%. Not too bad then that I am up 3%. I could have been down a lot more.
Looking at the Top 10 stocks on the NZX, it’s down 8.05%! These are supposed to be the Top 10 performing businesses in NZ. As you can see, this has far reaching effects when the 10 biggest, or best, companies in New Zealand are struggling.
And now onto the top 50 companies – which is known to follow the S&P, but be more resilient to substantial changes and provide a safer haven… It fared a lot better at only 0.15% down. It’s practically in the black! But overall – still down.
What can we take away from this then? Well, the 3% in the black is outperforming the market. Is this luck? Or is this because I thought about each purchase? I’d put it down to having a strategy and sticking with it. And also hedging my bets – like buying all the power companies, expanding into investment companies, and also not touching anything.
As someone once wrote – when looking at how you did over the year, if you beat the market, then you did good. If you performed the same as the market, you’re lucky. And if you did worse, then something needs to change.
And now to leave you with the scenario planner. I have adjusted it because I believe the 3% growth is here for a while and will take a long time to fix, even after Labour is voted out. Adding $10,000 a year, at a 3% growth will now put me around the $131,000 total by 2030. Things will change, and this could be even better. Or worse. Who knows really…
As 2021 draws to a close, I have even more motivation for reaching my financial goals. One of them is what’s known as “give every dollar a job”. I’ll be writing a lot more about that next month as I lay out my investing plans for 2022. I may even get to my fabled Crypto investing plan I have been building up.
For now, from the Dunkerley Family – we wish you a Merry Christmas and a Happy New Year!
December 31st, 2021
Current Portfolio : $31,631.87
Current Profit : $1,151.91 (3.78%)
And now I must put this in for the legal reasons…
I am not a financial advisor. All advice is taken with this in mind. I do not benefit from you using the same platform I do, or by using a different one. I do not have any insider knowledge of any company listed. Everything I will talk about – from the tools to the news – will be as available to me as it is to you. Again: I am not a financial advisor and never will be.
