Return 20.35% for Q1 2022 (My non-retirement account)

In this video, I share some lessons I learned for turning this portfolio around in 2022 Q1.

So i was just wrapping up my work and i was about to go down and take care of my newborn son but i thought hey i might as well just record this video first and share my success with you so we’re just wrapping up q1 2022 and this is one of my portfolio results here you can see this is my non-retirement accounts for people who are in canada and u.s this is my regular

Investing account not tfsa not ra na rrsp this is a regular investing account and since january 1st 2022 to today which is actually beginning of april uh the increase is around 22.9 so that is actually not bad i’m pretty happy with the result because i’m able to turn this portfolio around so if you have been following my channel for a while then you’ll realize that

Last year was quite volatile i’m sure a lot of you who have invested in technology have been down for example paypal is down and i talked about how to hedge and reduce your risk there and i also talked about like how to think about the chinese stocks as well which is very high risk so when you’re looking at this portfolio there are a couple of things i did to turn

It around and that’s what i want to share with you in this video today so one of the significant changes i made is that i invested in oil and gas in 2021 near september we were looking at oil and gas stock before winter so at that point within investing accelerator we worked out what is the supply and demand of oil and gas you know why is europe has such oil and gas

Crisis uh how does china come into play you know what is the inventory in russia and the rest of opec and we followed that quite closely so then in the end i invested in an oil and gas company called sun core in canada and oil price shot past 100 to 120 in something and then at that point i made over 100 from oil and gas and i exited so that is one of the positions

In my portfolio and if you look at my performance here and i compare that with s p 500 then here you can see that even though i’m at 20 something 24 depending on the day for my portfolio it fluctuates a lot because this is certainly a very rocky year and you can see it goes up and down a lot so as of the quarter end s p 500 is at negative 4.95 percent so if

You are investing index funds then this quarter unfortunately is negative but then if you look long term it should be positive if you look at my portfolio then at this point i’m at 20.35 percent return from january 1st to march 31st so i think that is a pretty good return i’m pretty happy about it because i’m able to turn around a portfolio faster than s p 500.

So the next significant position i made is really around gold so i invested in gold last year which is actually kirkland gold and then they got merged with another gold company called aem so there was a lot of events happening which caused the price to not go up immediately even though the company itself is very fundamentally strong once the merger is over then

There’s also the russian ukraine war which drove the gold price above two thousand dollars slightly above and that’s when i exited all of my gold position and now as of the time i’m recording this video for you gold has dropped back to the 1900s so now i’m looking at other opportunities in other industries so when you’re looking at this portfolio performance it’s

Only the first three months of the year so i’m actually pretty optimistic for this year it’s important to keep in mind that there was a market crash somewhere between 2021 and 2022 and is not immune to just me and you like the retail investors in fact a lot of hedge funds actually experience that decline as well so it just depends on what they’re investing in

Like because industries are in different cycles so when there is a decline in that specific sector then that hedge fund would encounter the decline so for example in the first three months of the year you will find that the big tech like apple google facebook was temporarily in a correction mode which is why the s p 500 you see here is negative 4.62 so one of

The examples i got for you is tiger global so tiger global is obviously one of the best hedge funds in the world and if you look at what they do is they historically make double digit return for many years so i think i previously had the charts but now i don’t have the chart anymore i don’t know why blooper changed the article but if you look at here the first

Quarter they actually fell 34 in terms of return so they actually lost 34 so even hedge funds are not immune to this crash so even though people didn’t say is a crash or whatever you can see that even tiger went down 34 so that’s why risk management is very important you know there’s no such thing as the perfect strategy what you need to learn is really to manage

Your risk the second one is jim simons he’s one of my idols he’s a really old guy and he focuses mainly on short-term trading like very frequently using algorithms or whatnot so if i just zoom in here and i go to here and you’ll see his return uh for his various funds in 2020 is actually negative so here you can see it was negative 19 30 30 so it’s actually

Not that uncommon for these hedge funds even though they make a very high return and they aim for um 20 30 return or higher to have a negative return year so when you are planning your retirement and i talk to a lot of people and they say i can’t take the volatility well if you invest in the two of the best hedge funds in the world tiger and jim simons you would

Have a down year eventually so it is very important to write it out work on your portfolio if you are in that slump and then you come back out on top so in my opinion i think the oil and gas and the gold play are over which is why i no longer have a position so going forward you should probably look at post pandemic and i think that is what will continue to

Drive growth in your portfolio and you do need to have that patience when it comes to investing another thing i learned is that over this period of market crash market correction it is very important to have cash on hand because when they suddenly go on a discount you want to put all your cash and average down as much as possible because you know the economy will

Recover the economy will reopen people will travel again and the pandemic will eventually be over so one tip for you is really i know a lot of funds that are currently buying right now so then if you’re feeling a little bit hopeless if you’re unsure what to do just remember you need to think like a hedge fund you need to think like a mutual fund and if you think

Like them then you wouldn’t act emotionally right now the stocks are down which represents a discount instead of quitting now of course there’s a caveat to this rule is that you need to invest in good companies if you invest in bad companies with bad fundamentals and bad earnings then the chances of it recovering will be very slim so that’s why a lot of times when

I’m teaching investing i stress technical analysis which is study the chart and the pattern and i also stress the fact that you need to analyze the fundamentals as well because yes technical analysis can tell you whether something is on a discount or not it can tell you the price has gone down and where it is likely to have a support level but it doesn’t tell you

Whether it will recover or not and when you’re looking at stock investing the future of the company what will bring it back up is the fundamentals of the company and the way you understand the products the business and so on so if you know those two then you can form a successful strategy and that’s why in my strategy i focus a lot on these two core pillars and

Then once you have a successful strategy then it is a matter of whether you want to multiply your profits using long-term options or do you want to create a monthly passive income out of it so i have been experimenting and implementing options to create monthly passive income and also long-term investing and i think you need to use both strategies so initially

When you are learning investing you want to have long-term growth tax-free compounding and that’s when you want to use a long-term strategy as you’re getting closer to retirement and you want to have a monthly passive income then that’s when you want to use options to create that cash flow for you which pays for more predictable expenses so let me use myself as an

Example so here you can see my portfolio value is 450k which is mainly long-term investing so right now this portfolio is still in the growth stage so i’m not trying to take money out of it i actually don’t withdraw money out of my portfolio anyways so i let it grow which uses long-term options to multiply my return over time selecting stocks are at a discount

And multiply them so which is quite a straightforward thing to do now let’s say i’m planning to retire tomorrow so if my target is to make 30 return a year with 450k then you just take that number times it by 0.3 so let’s say i round it to around 100k a year so that means i would be aiming for 10k a month so that’s what i would do if i’m using the monthly

Passive income approach on this portfolio which is to get 10k a month and i think with 5 to 10k a month a lot of people can already achieve their retirement goal so the question is how can you increase your return so then the amount of capital you need to be tied up can be reduced as much as possible so that’s why when it comes to investing i rarely or actually

Don’t invest in index funds like s p 500 because even though i’m getting like what 10 from s p 500 it doesn’t help me get to retirement fast enough because a well the growth is 10 which i think it’s okay but it’s not getting me 30 return which is my target and b if i’m looking for a monthly passive income well smb 500 return doesn’t really generate it and i can’t

Really rely on s p 500 to generate that return so i need an alternative method to generate that monthly passive income so right now if i’m looking at my own portfolio with the retirement accounts which i don’t take many money out of and the regular investing accounts here which i don’t take any money out of then i’m going to have a third account which i’m building

Right now which is for monthly passive income as well so that is kind of like at a steady state um and then i would draw money out of it on a regular basis to fund various expenses you know whether that is a mortgage payment for my newborn son for you know groceries or whatnot those more predictable expenses needs to be matched with a more predictable strategy

My monthly passive income strategy is aiming for 30 return a year so i know that it wouldn’t get something like 22 in three months it is worth it to implement monthly passive income strategy as well as long-term investing because long-term investing itself is volatile and i know as you approach retirement or when you’re thinking about retirement you don’t want

That volatility so that’s why the monthly passive income strategy exists but as a result of that predictability you also give up some gains so it’s just really a trade-off so for example in the ideal world if you have let’s say 400k and you want half of them generating monthly passive income which is three percent a month and half of them generating long-term

Return like 30 a year then you just allocated 200k each so the long-term investing will be volatile it will fluctuate because the market is unpredictable and there’s always uncertainty whereas for monthly passive income it will still be volatile but it will be more predictable which then you can budget to cover various expenses so that’s really how i think about

Retirement that’s how i think about you know my return to date i’m very happy that i’m able to turn around the portfolio faster than s p 500 in the quarter if you are interested in learning my investing strategy then you can go to my website and watch the free case study which is around two and a half hours long so that’s that and i’ll see you in the next video

Transcribed from video
Return 20.35% for Q1 2022 (My non-retirement account) By Eric Seto CPA