EN
As an early-stage entrepreneur, I began my investment journey just over a year ago with a modest portfolio of a few hundred dollars. Since then, I've consistently added to it each month as my financial situation has improved. While my stock trading app displays values in Great British Pounds, I prefer to discuss investments in U.S. dollars, as they are more widely recognized. It's important to note that the current stock market may be overvalued, but historically, the U.S. stock market has averaged a growth of about seven percent annually after inflation. Therefore, investing in U.S. companies for the long term can be a sound strategy.
My entire investment portfolio consists solely of stocks, which may not be advisable for those with significant wealth. Currently, my portfolio is valued at just under ten thousand dollars, allowing me to take on more risk without the immediate need for diversification into other asset classes. If the stock market were to experience a significant downturn, my investment would decrease, but it wouldn't drastically impact my financial stability. As I continue to invest, I plan to explore other asset classes such as real estate, collectibles, and cryptocurrency.
My stock portfolio is currently valued at approximately 9,300 U.S. dollars, which may seem small compared to other investors, but every investor starts somewhere. The portfolio includes one index fund, the Vanguard S&P 500, along with eight individually selected companies. The S&P 500 index fund tracks the performance of the 500 largest companies in the U.S. stock market, providing a diversified investment that typically yields an average return of around seven percent annually after inflation.
Investing in an S&P 500 index fund offers several advantages. It simplifies the investment process by allowing individuals to invest in a broad range of companies without the need for extensive research or multiple trades. By investing in this index fund, you can expect your investment to double approximately every ten years, quadruple in twenty years, and octuple in thirty years. This makes it an attractive option for long-term investors looking to grow their wealth.
While index funds provide a reliable return, I also invest in eight individual companies to potentially achieve higher returns. My strategy involves selecting companies whose products or services I use and believe have growth potential. This approach allows me to take calculated risks, knowing that I have time to recover from any losses. Notably, Warren Buffett advocates for index funds for the average investor, but for those passionate about investing, selecting individual stocks can yield greater rewards.
The companies I have chosen to invest in include Tesla, AMD, Nvidia, Apple, Netflix, Eventbrite, Corsair, and Weatherspoons. Tesla is renowned for its innovative technology, particularly in self-driving capabilities. AMD and Nvidia are key players in the computing industry, poised to benefit from the increasing demand for faster computers. Apple continues to expand its offerings, including potential ventures into self-driving cars. Netflix remains a dominant force in entertainment, while Corsair caters to the growing PC gaming market. Weatherspoons, a popular pub chain in the UK and Ireland, has significant growth potential, and Eventbrite serves as a short-term investment as events resume post-COVID.
I manage my investments through an app called Free Trade, which offers a user-friendly interface and no trading fees. This platform is available to UK residents, and opening an account is free. For those outside the UK, alternative options like Coinbase provide opportunities to invest in cryptocurrencies. By signing up for these platforms, investors can take advantage of promotional offers to enhance their investment experience.
In summary, my stock portfolio reflects a blend of index fund investment and individual stock selection, aimed at achieving long-term growth. By understanding the market and making informed choices, investors can navigate the complexities of stock trading and work towards building their wealth over time.
Q: What is the average annual growth rate of the U.S. stock market after inflation?
A: Historically, the U.S. stock market has averaged a growth of about seven percent annually after inflation.
Q: What is the current value of the author's investment portfolio?
A: The author's investment portfolio is currently valued at approximately 9,300 U.S. dollars.
Q: What type of investment does the author primarily focus on?
A: The author primarily focuses on investing in stocks.
Q: What is the benefit of investing in an S&P 500 index fund?
A: Investing in an S&P 500 index fund simplifies the investment process and allows for broad exposure to a range of companies, with an expected doubling of investment approximately every ten years.
Q: Which companies has the author selected for individual stock investments?
A: The author has selected Tesla, AMD, Nvidia, Apple, Netflix, Eventbrite, Corsair, and Weatherspoons.
Q: What investment platform does the author use?
A: The author manages investments through an app called Free Trade.
Q: Why does the author believe in selecting individual stocks?
A: The author believes in selecting individual stocks to potentially achieve higher returns and takes calculated risks based on companies they use and believe have growth potential.
Q: What is the author's future investment plan?
A: The author plans to explore other asset classes such as real estate, collectibles, and cryptocurrency as their investment journey continues.