Every past market crash looks like an opportunity, but every future market crash looks like a risk. ~Morgan Housel
The quote above by one of my favorite (financial) authors Morgan Housel rings very true for 2022 and most likely for 2023 as well.
Today I am sharing a brief look at the 2022 full year performance of my wikifolio "Picks and shovels plays" .
2022 will go down in history as the worst bear market of the last 14 years and my toughest year in the markets since I started to become a more active investor 7 years ago. Managing a public portfolio and other people's money has made the year even tougher. However, I still managed to close the year overall flat with a performance of -0.6% (after fees). German markets were already closed at 2pm CET on Dec 30th. Otherwise the performance would've been 0%. Still, -0.6% is a great result in comparison to the performance of most financial assets in 2022.
2022 was a year marked with very high volatility and the wikifolio reached its All time high of 240.38 € on Sept 16th. Unfortunately the massive volatility in the markets continued and drove down equity prices. Moreover, things still looked like I would be able to close the year with a +5-10% performance, especially since the inflation numbers that were released in December displayed a clear trend of decline in the inflation rate. The US FED meeting the day after destroyed all hopes of a positive annual performance and made crystal clear for investors, that the FED will not stop raising rates any time soon.
Since the year was more than challenging, I am happy that I ended the year flat and not with a double digit negative performance like many funds. There are of course some things I will do differently going forward.
After witnessing the high volatility of Q1 & Q3 I should have included into my portfolio management to sell the rips (broader market increases by more than 10%) and build up the cash position. this way I could have taken advantage of the lower share prices more often.
I also learnt to sell losers quicker and be cautious of downtrends, as they can last for a very long time and most of the time it doesn't make sense to hold stocks through the downtrend.
In closing, we find ourselves at the mid point of a massive bearmarket and it is unclear how it will progress. A lot will depend on what the US FED will do & say in the coming months. Morgan Housel's quote describes very well the dilemma we are in as equity investors. In addition, in bearmarkets it is easy to be hyperfocused on short term developments and loose sight of the long term. Even though annual performance was flat, the average annual performance of the wikifolio is currently at +30.6%, which is an exceptional achievement.
Compare
Please find all the relevant full year 2022 KPIs for my wikifolio below. The performance shown for Picks and shovels plays is the net-performance (fees are already deducted).
Chart comparison full year 2022 featuring the Picks and shovels plays wikifolio (green) and NASDAQ (yellow).
Full Year 2022:
Picks and shovels plays -0.6%
S&P 500 -20.0%
NASDAQ -33.9%
Since inception Dec 21st 2020:
Picks and shovels plays +72.5%
S&P 500 +3.6%
NASDAQ -18%
Picks and shovels plays KPIs
You can see all the real time data (position sizing, trades, performance, etc.) of my wikifolio here. You just need to register to have access. There are no costs involved to see the wikifolio.
The Picks and shovels plays wikifolio did IPO in June 2021 and can be traded on the German exchanges "Boerse Stuttgart" and "Lang & Schwarz". The net-performance since IPO in June 2021 is currently +17.5%. In comparison, the NASDAQ performance since 6/1/21 is -24.3 %.
206,624 € have already been invested (including my own money). Many thanks to all investors! If you want to invest, please visit wikifolio, register and find all information there.
