Stock Portfolio Up 68% in 18 Months!

Regulars of this blog might recall this first post in October 2008 when, just as U.S. and world stock markets appeared to be in a disastrous freefall, Marketman & family decided to pick out a hypothetical portfolio of 10 stocks into which we invested a total of USD200,000 as a learning exercise for the Teen and perhaps other readers of the blog. After one short week, the portfolio was up 6.9%, but in the weeks and months that followed, they were on a wild rollercoaster ride that saw them rise rapidly and fall by as much as 10% as well. After 6 months of elapsed time, the portfolio was up by 11%, or 22% on an annualized basis. At the one year point, in October 2009, the portfolio was up a rather stunning 43%, and in case you thought all stocks were up at that point, the Dow Jones Index was down 4.46% and the NASDAQ was up 9.85% for the same period under review…

At the one year mark, I suggested that one might cash in on their gains, stick the funds into low-yielding deposits or put a down payment on a home in a depressed housing market. But had you continued on with the portfolio, and didn’t make any changes in its composition, you would have a stunning total return of 68% for 18 months! Wow! The hypothetical USD200,000 would now be worth some USD336,000 including dividends and less brokerage fees. Over the exact same 18 month period, the Dow Jones Index was up roughly 30%, while the NASDAQ was up by 49%, so the 10 stock portfolio we picked beat the market averages by a significant margin. Here are the individual stocks and how they did since the original date of purchase:

Apple Computers +175% (Whoa! Incredible. Just incredible.)
Coca-Cola +58% (Must have been all that Diet Coke I consumed…)
Goldman Sachs +99% (A fantastic firm, and from the financial debacle, they were one of the few that called it “right” and emerged from the ashes…)
Boeing Aircraft +72% (An unlikely pick at the cusp of a “recession”, but it has done very well indeed)
CVS +22.5% (A modest gain, but provided diversification, just in case…)
GE -3.5% (Problems at financial unit kept dragging this stock down, but it’s on the mend…)
PLDT +18.6% (The weakest gainer, and it wasn’t because of MVP’s plagiarism…)
Amazon +151% (The Teen’s pick, the second largest GAINER in the portfolio, she picked well, kimosabe…)
Hershey’s +26.6% (Sweet, in both senses of the word, also a Teen pick)
Microsoft +37.9% (Mrs. MM’s pick, but she has since switched to a Mac… :)

Let me reiterate that I am not encouraging you to invest in stocks, I simply did this exercise to show you what can happen if you decide to participate in the stock markets. And most importantly, when you happen to have the guts to place your bets when 9 out of 10 other investors are freaking out and saying it’s the end of the financial system as we know it.

And as an aside, and a serious jab at folks who took me to task for my PIPC posts, compare these stock returns with those who got stuck in that pyramid scheme of sorts… And if I am not mistaken, not one iota of money has been returned to investors caught up in that scam… so my posts on the matter have withstood the test of time as well. If you care to go back and read those posts, click here and here. I do wonder where such adamantly pro-PIPC commenters such as “polypoo” and “Inquirer” are today, and if they finally realize they were in the midst of scam and were essentially defending those who were at the center of it all… Time will tell. It always does…