Thoughts After Reviewing My Portfolio This Year

It’s the end of the year, so I just did a bit of tidying up. This isn’t a post to show off—just a record of things I’ve felt while running my portfolio for a few years.

Starting with the conclusion: the index won this year. Individual stocks were about 40% of my portfolio, and two of them hit -30%, eating into my overall returns. Meanwhile, an account holding only S&P 500-tracking ETFs rose more than 20%.

• The problem was increasing position sizes because I was confident. “Conviction” and “evidence” turned out to be different things.
• I didn’t rebalance even once a year. As a result, I left the winners as they were and neglected the losers.
• I kept cash at 5%. I think this was a good call. When I suddenly needed money, I didn’t have to touch my savings or time deposits.

My plan for next year is to reduce individual stocks below 20% and mechanically rebalance every quarter—moving in the direction of minimizing judgment as much as possible.

The hardest part of investing seems to be practicing what you know.