Investment wise, 2017 was as calm as a mill pond.
The stock market did not crash. There was no zombie apocalypse to speak of and The World continued a 4 billion year lucky streak by not ending.
My portfolio enjoyed a year of double digit returns with my stock picks delivering a total return of 13.5%…just beating the FTSE All Share index which gave a total return of 13.1%. 13.5% was actually a shade below my results in the past which are currently running at 14% annualised over the last 21 years. If you start with £1m and grow it at 14% per year that turns into £15.7m over 21 years. Unfortunately, I started with nothing.
13.5% is not bad but under-performed a simple Vanguard S&P 500 tracker fund which in 2017 delivered ~21.8% in $ terms (with a lot less work). This is a handy reminder that you can start investing effectively even if you know very little about investing.
If stock market history is anything to go by, these sort of returns are probably too good to last forever but I’m enjoying them while they do.
It’s not like there haven’t been warning signs. The Escape Artist has been writing for a while about the CAPE on the US market being high (currently 33x versus its long term average of 16x). Somewhat scarily, GMO Investment Management are now forecasting negative returns over the next 7 years for all mainstream asset classes other than emerging market equities.
And don’t get me started on the whole crypto-currency thing (which seems to have a similar effect on males under 30 as fast broadband combined with abundant internet pornography). Did these guys not read Day Trading : Frankie Goes to Vegas???
Its also interesting that in 2017, the stock