The hypothetical $200,000 portfolio purchased last Friday, October 9, 2008 comprised 10 stocks. On Monday, I thought we were brilliant as the Dow Jones Index soared to one of its biggest one-day gains EVER, at 11+%. That was followed by a euphoric rise in Japan on Tuesday at 14%. But the Dow retreated on Tuesday, then PLUNGED horribly on Wednesday and I was feeling a bit of whiplash. It recovered some of the losses yesterday, Thursday, in New York and I checked on the MM portfolio first thing this morning…
Marketman’s 5 picks, at $20,000 each are now worth:
Goldman Sachs $24,953
Boeing $ 21,320
Total Value MM $112,619
Mrs. MM and The Teen’s 5 picks at $20,000 each:
General Electric $20,924
Total Mrs. MM and the Teen $101,158
Total for 10 stocks, $213,777.
It’s absolutely early goings, and the floor could still fall out from under before it rises again, but if you had a weak constitution, you could sell out first thing Friday morning New York time, just a week after entering the market, and the total gross return would be $13,777 or 6.9% for one week’s time. NOT BAD at all, if you ask me. Of course you would have to remove broker’s fees, a percent or so. If you then stuck your money in a time deposit earning just say 4% for the rest of the next year, then your total annual return would be 10-11%. But let’s stick with the stocks for several years, make this a long term example… Other points to be taken from this tiny example… 8 out of 10 stocks picked ROSE despite the volatile past week. Some stocks, like Goldman Sachs or Coke rose by more than 20% in one week and if you had only purchased those, you would be dancing right now. Mrs. MM and The Teen picked four stocks that went up, and one that went down, but they had more modest increases than Marketman’s. But the stock market is not for uninformed or risk-averse investors. Best to understand it, learn how it works, follow some stocks you might like and see how far your instincts take you. For me, this is just a game… but duhhh, if I really DID put my money where my mouth was on Coke last Friday, we could have had a lechon EACH during the eyeball… heeheehee. :)
Warning: Marketman is NOT encouraging or endorsing the global stock markets as an investment option for you, I am just playing a hypothetical game to teach The Teen and perhaps some of you, if interested, how the stock markets work.