As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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Saturday, 21 April 2018

How I Grow My Investment Portfolio At 18% CAGR Over 17 Years???


Solid 18% CAGR over 17 years from Jan 2000 to Sep 2016

How?



Scroll down!

:-)













By doing monthly capital injection into his investment portfolio!

Hurray!

18% CAGR!

You think this is an investment joke?




























6 comments:

  1. CW,

    LOL!

    Ain't it the truth!

    That's how we can dilute out our losses and survive our investment mistakes ;)

    What can't kill us will make us stronger!


    That's why I had a field day poking fun at those who conveniently "forget" about cash injections when calculating their XIRRs.

    I don't think its a deliberate attempt to "cheat'. I suspect unconsciously, some cannot accept the obvious fact most of their portfolio growth come from "earn more and save more"; not their "investing prowess" ;)

    Shh...



    ReplyDelete
  2. LOL! IRR is supposed to take care of this financial sleight of hand ... to show the actual gains not due to cash / capital injections.

    So if someone starts with $10K and grows it to $16,300 ten years later; but also puts in $1M Toto jackpot at the end of the 8th year and grows that to $1,102,500.

    Then at the end of the 10th year, with total portfolio of $1,118,800 the IRR is still 5%.

    -------------------------------------------------------------------------------------
    How about people like us with no regular good / high income to cover the blemishes? :)

    Long term holding of dividend paying assets? Yield hogs? What if price gets cut in half? Never mind got panadols! :)

    Harvesting of assets whenever overbought or irrational exuberance? The trick is to know when is overbought ... and how much to harvest? ;)

    Have a large warchest & practice being a very patient monk? Hohoho...

    ReplyDelete
  3. i know about this "problem" of cash injection commingle with stocks actual trading that i will lost track of CAGR.

    So from the beginning i started a "Virtual Cash Injection" of $1,000,000.00 for my stock portfolio. Therefore no new cash injection commingle with my stock portfolio problem for all these years.

    What U see is what U get absolutely - The perpetual "Virtual Cash Account".

    Is there anything wrong with my "method" for keeping track of CAGR?

    ReplyDelete
  4. Hi Uncle8888,

    For those who may not realise, your chart's summation of total earned income is actually IRR or XIRR of 0%

    Whoa! Don't hit the face ... or any other delicate parts!! LOL!!

    If measuring average growth rate of income, then should be final year earned income / 1st year earned income. :)

    ReplyDelete
  5. Formula for Compound Annual Growth Rate (CAGR).

    i am basing my initial investment as "$1,000,000.00 Virtual Cash".
    Can CAGR be calculated base on this $1,000,000.00.

    Suppose now my Virtual account is $1,200,000.00 and my portfolio value is 100,000.00 after ten years.

    Can CAGR be calculated with all these data?

    Actually i use Microsoft money to track for me.
    My maths is really rudimentary.
    i am not sure Microsoft Money is right or wrong.
    But based on the data of $1,200,000.00 and a balance of stock portfolio of 100,000.00, i know i can be sure i am up $300,000.00 after this ten years.
    This is only an example i think i can try to understand.
    But can Microsoft Money calculate CAGR based on these data?
    i am not sure leh.

    ReplyDelete

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