The markets are experiencing post-election euphoria. However, wise investors know that staying invested in the market, regardless of the short-term ups and downs, is the key to long-term financial success.
In January 2018, an investor on r/investing – a discussion board for stock enthusiasts with more than 2.8 million members – shared his success story and investment journey. The investor, who said he was 50 years old, started with about $20,000 in student debt and earned about $21,000 in his first year out of college.
“I opened my first brokerage account with $2,000 in Ameritrade in 1997, thinking I was going to jump in the dot-com bubble. I was buying and selling weekly and riding that baby down. I never actually made any money and when the whole thing crashed, my $2,000 literally dropped to $37. A lot of internet stocks just evaporated.”
However, he did not lose hope and continued to return to the market, making some changes in his investment approach:
“I’m pretty much focusing on mutual funds now after getting my hands on individual stocks a few times. The few I have left are ‘sentimental.'”
The investor said “virtually all” of the portfolio came from him putting small amounts of money into the market through 401(k) and IRAs. He lived below his means to save:
“I bought cheap used cars when I was under 25, but then bought a new car and drove it for 20 years,” he added.
He shared screenshots of his portfolio showing the positions and the value of each position. The total value of his portfolio as of his post was just over $1 million. He shared his investment strategy:
“I basically buy and just leave it. The last time I sold was about three years ago when I last rebalanced. I held out through the entire 2009 recession and lost about 60%. I’ve always invested quite aggressively, so I got hit hard when it went down, but I recovered well when it went up.”
‘Never tried to time the market’
An important lesson from the investor: never try to time the market and be patient.
“I’ve never tried to time the market, so the last six months won’t change that. I’ll probably switch to more conservative investments at some point, but I’ll probably always be over 75% in stocks.”
Based on publicly shared portfolio screenshots, let’s explore some of the investor’s biggest holdings.
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The Emerald Growth Fund
The Emerald Growth Fund Class C (HSPCX) was the investor’s largest holding, whose portfolio was worth $1 million. HSPCX focuses on small and mid-cap growth stocks. Some of the fund’s largest holdings include FTAI Aviation, Freshpet, Carpenter Technology and Credo Technology. It has risen 26% in the past year. The investor held 7,654 HSPCX shares of the fund in his portfolio, accounting for approximately 18% of his total investments.
Vanguard 500 Index Fund Investor Stocks
The Vanguard 500 Index Fund Investor Shares (VFINX) was the second largest holding of the investor who self-managed his portfolio for years and reached the $1 million mark. The fund tracks the performance of the S&P 500 Index by investing in large-cap US stocks. The investor owned 626 shares of the fund, which were valued at about $163,311 at the time. During the discussion, someone asked the investor why he invested in this fund and recommended exchanging his position for Vanguard 500 Index Fund Admiral Shares (MUTF: VFIAX). This is what the investor said:
That’s a good one and part of the reason I posted the details. I’m not sure why I missed VFIAX before. It’s available through E-Trade and only has a minimum initial investment of $10,000, so I had should find it unless they just started offering it Thanks for the tip.”
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The Fidelity Select Air Transport Portfolio
The Fidelity Select Air Transportation Portfolio exposes investors to airlines, airport services and related businesses. The investor, who reached a $1 million portfolio, had 1,139 fund shares. Air Transport Services Group, United Parcel Service, RTX and Delta are among the fund’s largest holdings.
Fidelity Select Industrials Portfolio
The Fidelity Industrials Portfolio (MUTF: FCYIX) invests in construction, aerospace, engineering, machinery and manufacturing companies. Over the past year, FCYIX has risen a whopping 47%. The investor held 2,618 shares of the fund in his portfolio, worth $101,243 when he took office five years ago.
Investor class Hennessy Focus Fund
Hennessy Focus Fund Investor Class (MUTF: HFCSX) is known for its concentrated portfolio that focuses on high-quality companies with growth potential. The fund invests in companies with a high level of conviction for five to ten years or longer. As of November 8, the fund’s portfolio consists of 23 shares. Its largest holdings include AST SpaceMobil, Brookfield Corp., Ashtead Group, O’Reilly Automotive and American Tower. The investor had 1,074 shares of the fund in his portfolio.
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William Blair Small-Mid Cap Growth Fund
The William Blair Small-Mid Cap Growth Fund Class N (MUTF: WSMNX) invests in small and mid-cap growth stocks. The investor, who reached a stock portfolio of $1 million, had 3,357 shares of the fund in his portfolio, worth $87,063 at the time. The fund has grown by 55% over the past five years.
The James Balanced: Golden Rainbow Fund
The James Balanced: Golden Rainbow Fund Institutional Class (MUTF: GLRIX) invests in stocks, fixed income, cash, and ETFs, with the goal of maintaining balance in its portfolio. The fund is up 9% over the past five years.
Microsoft
Microsoft (NASDAQ:MSFT) was also part of the investor’s portfolio. At the time he shared his post, he owned 250 shares of the company, worth $22,975. The stock has risen 14% in the past year.
Alibaba.com
The 50-year-old investor who had $1 million in his stock portfolio had 100 shares of Alibaba Group (NYSE:BABA) in his portfolio. The stock has fallen 50% in the past five years.
Metaplatforms
The investor who reached the $1 million share portfolio milestone held 100 shares of Meta Platforms Inc. (NASDAQ:META), now Meta Platforms. The stock is up about 208% over the past five years.
T. Rowe Price Latin America Fund
T. Rowe Price Latin America Fund (MUTF: PRLAX) gives investors exposure to Latin American stocks. PRLAX is down about 12% so far this year. It has shown volatile performance due to the market situation in the region and currency fluctuations. Itau Unibanco Holding, Petroleo Brasileiro, Vale and Grupo Mexico are among the fund’s largest holdings.
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This article 50-Year-Old Makes $1 Million in Stock Portfolio, Stocks Top 11 Holdings and Tips – ‘I Pretty Much Buy and Just Leave It’ originally appeared on Benzinga.com
