Making Money From Investing

Making money from investing is the goal of all successful investors. On that, I think everyone agrees. Investors that enjoy the most success obsess over the details; what to buy, how much to buy, when to buy it, when to sell it.

Why? Because they're relentlessly trying to improve performance. It’s not enough to just monitor your personal finances or the market. You need to translate that knowledge into action and assess your results.

Remember those investing principles? There are two, in particular, that are directly related to this part of your process:

6th Principle of Investing Safely
Continually measure the performance of your plan or system; there is always something that can be improved.

9th Principle of Investing Safely
Improving your returns requires improving your system; tools alone will not improve your profits

It's with those two principles in mind that spend time each year examining the outlook, the opportunities and challenges that come with translating signals into trades, as well as refinements that can improve future performance.

Here are the past performance reviews:

2015 Performance - Stock Market Outlook

2016 Performance - Stock Market Outlook

2017 Performance - Stock Market Outlook

2018 Performance - Stock Market Outlook

And remember: All models are wrong, but some are useful. The objective here is to give readers of my blog an example of systematically using an investing process, covering translating signals, executing trades, reviewing performance and adjusting methodologies. Providing this analysis (which mimics what I do for all my personal trading) gives you an example of the safe investing processes in action.


2015-2017 Total Return

Here are the total returns from January 1, 2015 through December 31, 2017 for the market indexes and the Stock Market Outlook, based on the purchase of 100 shares.

Symbol Type Buy / Hold Market Outlook Delta
S&P500 ^SPX Index 30.1% 29.0% -1.2%
S&P500 SPY ETF 30.6% 28.8% -1.8%
S&P500 FXSIX Mutual Fund 30.5% 30.7% 0.3%
S&P500 VOO ETF 30.9% 29.0% -1.9%
S&P500 VFINX Mutual Fund 32.3% 33.0% 0.7%
Nasdaq QQQ ETF 51.8% 49.5% -2.3%
Russell 2000 IWM ETF 28.8% 18.9% -9.9%

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