The 2024 Stock Talk Portfolio: A Year of Learning and Growth*

As 2024 comes to an end, I have spent some time reviewing the Stock Talk portfolio results. The portfolio followed the 2024 Game plan (posted on January 2nd). This was a year of both wins and lessons. While the overall performance was quite strong at 23.5%, with the equity portion (~70% of the portfolio) delivering a solid 36.9%, it wasn't without its challenges.

One of my key objectives at the start of 2024 was to move the equities part of the portfolio away from picking mainly individual stocks and instead skew more towards index funds. The thinking is that even most of the best stock pickers can’t beat the indices in the long run. In 2024 the index ETFs I bought (XIC, DIA, SPY, QQQ) all performed very well (Year To Date Rate of Returns in the table below); however many individual stocks performed significantly better– including the stocks that I decided to sell at the start of the year: Manulife, Citigroup, Norwegian Cruise Line, Salesforce.

Looking at the group of stocks that I kept in the portfolio (listed below) we see that those (with the exception of the Canadian Dividend paying stocks) all also performed significantly better than the indices. 

So what does this mean? I have been reflecting on this, and I think the important thing to remember about the old adage, ‘even the best stock pickers can’t beat the indices in the long run’- is the last part- the long run.  The objective of long term investing is not to have a quick win in the short term, but rather to build substantial wealth over time so we can use money to make our best life happen. 

The reason I moved a larger percentage of the Stock Talk portfolio into the index funds wasn’t to maximize returns in a 12 month period, rather it was to shift the risk profile of the portfolio, and ensure its ability to deliver possibly smaller but still healthy returns over the long run.

So while in hindsight, I of course would have loved to have had the 46.9% Rate of Return (RoR) of continuing to hold NCLH! I know that removing it lowered the volatility of the portfolio which was one of my key objectives, and I am happy that the overall equities return (with a mix of index funds and individual stocks) still beat the market at 36.9% RoR.

This post primarily concentrates on the evaluation of equities, which constitute the largest segment of the portfolio. The remaining 30% of the portfolio is allocated to fixed income assets: 20% in a GIC ladder and 10% in a money market ETF. Together, these investments achieved a 5% rate of return, providing a respectable risk-free return that contributes to balancing the portfolio's risk profile.

Balancing risk tolerance and desire for returns is something that can and should change over time as you work towards new goals as well as go through different life stages. 

Looking ahead, I'm excited to continue learning and refining my investment strategy; which I will be sharing in my upcoming 2025 Game Plan post.

As you evaluate your results for 2024 and set your goals for 2025, keep in mind your objectives, risk tolerance and timeline. Whether you're new to investing or a seasoned investor, I'm always happy to discuss investment strategies. Feel free to reach out for a "Stock Talk" anytime.

Claudia Soler

December 22, 2024

* Disclaimer: The information contained within this blog is for informational purposes only and it is not intended as a recommendation of the securities highlighted or any particular investment strategy; nor should it be considered a solicitation to buy or sell any security. In addition, this information is not represented or warranted to be accurate, correct, complete or timely. the securities mentioned in this blog may not be suitable for all types of investors and the information contained in this blog does not constitute advice. Before acting on any information in this blog, readers should consider whether such an investment is suitable for their particular circumstances, perform their own due diligence, and if necessary, seek professional advice.