Investment Portfolio Check: 2020

Investment Portfolio Check: 2020

As the year comes to an end, it’s time for me to take a look at what I’ve done in the past 12 months of 2020 with my investment portfolio. It was a long and turbulent year, there were lots of ups and downs, but most importantly I can say that I learned quite a lot.

This was my first year of investing real money. Before that, I had demo accounts on a couple of platforms, but I never had the courage to invest my own money. As my partner and I started to talk about investments early last year, she sparked my curiosity in the space, so I focused on the topic once again.

How I started my investment portfolio?

In reality, I started firstly with Revolut as it allowed me to do fractional shares investing. That allowed me to test how things work and to invest my first couple hundred dollars. To be honest, I was a little bit nervous, as I had no clue how things would turn out.

The moment I started my investment portfolio wasn’t the moment I stopped to learn and read about investing and financial literacy. It was actually the moment I began investing more of my time into the learning process. I know this wouldn’t be the 1st time I’m saying this, but 2 books helped me quite a lot: The Strategic Dividend Investor and The Intelligent Investor. I cannot recommend them enough.

Soon I discovered that I need a more trustworthy platform than Revolut and started my own research for an investment brokerage firm. That research concluded and I picked up Interactive Brokers. As I wrote later, I did a mistake and I had to close all my positions in October, reopening them again right after that into a new account.

That meant that I probably lost some money or at least the profits that I earned to that point. However, the impact in the long term of my decision on that is that I’ll reduce inactivity fees as I have only 1 or 2 transactions a month.

Investment portfolio as of December 2020

I basically did my investments for the year last week, plus the €100 I was going to invest in January. Yes, in advance. The reason for this is because in our company we get our January salary in December, so usually, this is the time of the year when I save most of my income. Not sure if that’s going to be the case this year, but we’ll see.

As I still hold some positions in my Revolut account, my investment portfolio will change slightly at the end of December when I plan to exit Revolut. The reason I’m parting ways with Revolut is that I kinda don’t trust their policies. My opinion is based on lots of media articles and Reddit posts about closed accounts without notice or a reason.

Apart from this, I secured myself with an emergency fund that could cover about 10 months of my base expenses, plus travel and sinking fund. In reality, I’m saving more cash on the side that I’ll need next year. I’ll use that for a new car, home renovation, and some education and certification I want to take.

Investing in dividends is the way to go for me

As I talked about already in my blog, my investment strategy is investing in companies paying off dividends. The reason for this is that apart from appreciation of the assets I am investing in, I would like to earn dividends as a passive income. The goal would be to have the dividend income covering our household utility bills, groceries, and other things. 

These companies would be having a 2-4% dividend yield, paying dividends for a decade or more, and with stable balance sheets. I suppose to some extent I would focus on dividend aristocrats, but we’ll see.

As a diversification strategy, I would be investing in the iShares S&P500 ETF (stock ticker: SXR8). At some point next year I would be looking at bonds ETF and/or to buy a property, renovate it, and list it for renting/sale.

Investment plans for 2021

I suppose the Covid19 wouldn’t magically end on January 1st, 2021. That’s the reason I’m going to continue with steady investments of about €100/month, for most of the time. Since there are going to be some big spendings in 2021, I’ll need the cash I’m putting aside, so I’ll basically continue to save it.

The goal for my investment portfolio would be to reach €2500 by the end of 2021. Not sure if that goal is reachable, but I’ll definitely try to make it. I don’t have specific goals for cash holdings, as the goal of having them in the 1st place is to cover the things I mentioned: car, home renovation, and education.

As for personal development plans, the plan is to take a PMP course and get certified. This will ensure that my paycheck can rise even higher in the future and open the door for more possibilities. Apart from this, I’d also love to have the opportunity for this blog to reach to more people. That would really motivate me to create more content.

What are your investment plans for 2021? How did your investment portfolio perform in 2020?

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