Safe Haven Monthly Update

Which type of investor achieves the highest return on investment?

Fidelity conducted a customer account performance review between 2003 and 2013. The results were simply shocking. The audit revealed that the best investors were, wait for it - DEAD. The other group that outperformed is the people who had completely forgotten they had accounts. You can probably see where we are going with this. The best investing strategy is sitting on your hand and patiently waiting for compound interest to do its thing.

Our speculation on why dead people beat everyone else is that there was no temptation to employ recency bias and sell a stock simply because the price of the company went down or assume that the recent bad economic conditions will continue perpetually into the future. Patience is the most difficult part of investing but also the most important.

There are a few caveats to this principle, your time horizon matters and the type of security plays a significant role. If you are investing in micro-cap speculative stocks you should probably keep a closer eye on your individual companies compared to investing in an S&P500 index ETF. 

Although the Safe Haven portfolio consists of 10 individual stocks, the metrics used to pick these stocks almost guarantee quality which makes this a  portfolio for the patient investor.

We generally recommend that individual stock investors focus on purchasing a group of high-quality companies improving year over year. Compounders are generally good companies that are getting even better. Diversification limits volatility and moats protect the future of the respective companies. If you buy good companies that are improving, and each of these companies is exposed to a durable theme, you need to hold on to your position. If you have a higher risk tolerance, have a look at our Core Fund for a list of 20 growing leaders.

Portfolio Update Summary

We are adding to all ten positions in our Safe Haven portfolio on recent share price weakness.

• Buy $200 HD at $289.20
• Buy $200 SBUX at $83.00
• Buy $200 AAPL at $155.55
• Buy $200 PG at $137.26
• Buy $200 RACE at $190.79
• Buy $200 BRK.B at $279.30
• Buy $200 DIS at $110.46
• Buy $200 TXN at $162.68
• Buy $200 MO at $44.86
• Buy $200 LMT at $418.68

Disclosure

This article is not financial advice and is based on the opinion of the author.  This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products. The $10K in the Safe Haven is not real money and only a demonstration of a typical portfolio.