First off, Happy Birthday to my wife!
Well, another year gone. For me, it was a great year even though for the third year in a row, I didn’t have regular employment. I consider all the time off a blessing though. If only I were able to travel more! This year, 2014, I really need to find regular employment. My cash reserves will definitely run out sometime this year if I don’t have regular employment. Of course, I’ve been saying that for the last two years, and the money hasn’t run out yet (thank God!). I’ve been able to stretch my funds with odd jobs, contracts and substitute teaching.
As with all New Year’s days, I began my day by going through my annual finances. For the third year in a row, despite not having a job, we’ve actually made a profit because our stock gains have outpaced our cash losses. Albert Einstein was right: “compounding is the most powerful force in the universe.” And this was a very good year, a 26% gain for us. Alas, before I pat myself on the back for my stock-picking prowess, I must also come to terms with the reality that for the third year in a row, I did not beat the S&P500 (29.6% gain in 2013). By this measure, I’m actually losing potential gains, and I’m a below average stock picker. For nine of the thirteen years that I’ve been in the stock market, I’ve beaten the S&P500 quite handily, but about three years ago, I started to go conservative on my portfolio to avoid losing money. And while I have indeed lost less money, I have also not gained as much… so late in 2013, I went back to my old ways, and truthfully, most of my gains for this year were from the last quarter, after I changed back to my old ways. Hopefully, this won’t bite me too much whenever the market drops. These days though, I put stops on most everything to avoid some of my past disasters – riding the market to the bottom and then having to crawl back to where I was. For now though, I’m happy – I hit a particular financial goal of mine that I’ve been working on for years, and it looks like I will, indeed, be able to retire in the manner to which I have become accustomed. God is good! He takes care of me! My personal goal for this year is to again start beating the S&P500 by several percentage points on an annual basis. It calls for a riskier strategy, but also offers more rewards over time.