Here's How My Stock Portfolio Performed in 4 Months
I got a windfall and instead of using it for Detty December, I decided to buy the shares of Zoom. This year alone, Zoom has gained more than 50% and I’m riding the winning bull all the way.
So, someone on Twitter asked what my ROI was since investing in stocks using @InvestBamboo
I started buying stocks with InvestBamboo in December 2019 and I currently have the following stocks in my portfolio.
Advanced Micro Devices (AMD)
Zoom Video Communications (ZM)
Virgin Galactic (SPCE)
Over the last four months, Microsoft has delivered 15.64%, AMD has gained 45.52%, Shopify has climbed up 99.99% and Virgin Galactic has surged by an amazing 162.1%.
*Please note that I didn’t buy all five stocks at the same time and the actual performance of my portfolio reflects the timing of each stock purchase.
Conservative plays - 45.47% of Portfolio
Microsoft is the bedrock of my portfolio - it is a safe play - and it accounts for almost 50% of my portfolio composition.
Why did I buy Microsoft?
I needed a stock that was stable but still had decent growth prospects and Microsoft ticked all the boxes. With a market cap of $1.29 trillion, Microsoft wasn’t going to disappear overnight. It had a visionary CEO, (I’m a fan of Satya Nadella) I’ve already made the call since 2014 when he became CEO (I tweeted about it here).
And Microsoft makes amazing products. I had the Microsoft Surface Book - Apple fan club would love to argue, but you need to use a Surface Book to know how amazing Windows machines could be.
I digress, but the point I’m making here is that the key to successful long-term investments is to buy stocks of businesses that you know or at least understand.
I didn’t see COVID-19 coming, few people saw it coming in December, but Microsoft’s financials were right. At the risk of oversimplification, it would be easier for a stock trading at $150 per share to soar to $1,500 per share than for a stock trading at $1,500 to soar to $15,000.
Growth Plays: 44.72% of Portfolio
Advanced Micro Devices (AMD) is a growth stock in my portfolio. It operates in the semiconductor industry - it makes computer processors and graphics cards used in consumer, gaming, and enterprise devices.
One of the reasons I bought AMD is its diversified customer base which includes Apple. Boeing, Cisco, HP, and IBM among others. AMD is an indirect play, inasmuch as these companies are doing well, AMD should logically be fine.
The financials also made sense to me - I won’t bore you with the details today.
Also, the fact that it had gained 189% in 2019 whereas its older and larger rival, Intel only gained 21% reaffirmed the value of AMD’s customer base to me.
And yes, the fact that it was trading under $50 sweetened the deal for me.
Whew! This is getting really long.
Shopify is the second growth stock in my portfolio. I love that it is debt-free and the CEO is a likable fellow with global ambitions.
Shopify provides the platform for businesses to run online stores, sell via social media, or sell in person. E-commerce was already big before COVID-19 and it will continue to be for the foreseeable future.
I bought Shopify because I did some research on them in my day job and found out that the company has more than 820,000 merchants use its platform for their stores and it has more than 500,000 active stores.
Speculative Plays: 9.81% of Portfolio
Zoom Video Communications (ZM)
To be honest, when I bought Zoom, it was a purely speculative play. I use Zoom at work to communicate with my teammates in other parts of the world and I see how amazing it was for teleconferencing. I never knew COVID-19 will happen and that the share price will skyrocket.
I got a windfall and instead of using it for Detty December, I decided to buy the shares of Zoom. In my mind, if I lost money on the deal, I’ll just consider it money spent on wine and chills and not beat myself up about it.
This year alone, Zoom has gained more than 50% and I’m riding the winning bull all the way.
Virgin Galactic (SPCE)
Virgin Galactic is another speculative (think crazy bet) play. I bought the stock with the other part of the windfall that I spent on Zoom. The first few weeks were amazing - the stock gained 21% in a single session. However, the company is still in development, never turned a profit, and it may not be profitable for the considerable future.
When COVID-19 happened, survival took precedence over luxury flights to space and the stock is down about 40%.
In hindsight, I probably should have sold after the gains of the first few days but I’m content to hold and see how it all plays out.
If you have read this far, you’ll have noticed a consistent theme about my knowledge of the actual underlying businesses of the stocks I bought.
This is the singular factor that separates investors from gamblers.
I hope you learn a few things about investing in stocks and I hope that you are fired up to go invest and score big wins.
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Over the weekend, I’ll write a new post on the stocks I’m planning to buy next and explain why each stock is on my watchlist.
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Here’s wishing you a successful investment journey.