Stock picking (most investors' nightmare)

Stock picking


Ah yes, of course a vast number of investors think themselves smarter than the market or think that somehow they've struck gold picking certain highly praised stocks...


Over the same 6-year period that I've covered with European and Emerging markets, I've been carefully investing in selected companies, again actively buying & selling with stock on average staying 1 year in my portfolio.


The results:

• Average gains of about 5% in share value plus another 5% from dividends
• Average annualized gains (share value plus dividends): ca. 9%
• Average annualized gains Euro Stoxx 600 over the entire period: 6%

Conclusion:

• In this particular case, stock picking did beat the market although these results are mostly boosted by a few companies who have consequently outpaced the market
• Taking those companies out of the equation would have resulted in ca. 5% annualized gains which is still slightly below what the European market did