2024 was another stellar year. The Vestact model portfolio rose by 40.9%, crushing the S&P 500 by a wide margin. This is a real portfolio which pays advice fees and occasional brokerage charges and earns dividends. It belongs to an East Rand-based businessman who sent us $800 000 in 2014. The account is now worth over $5 million.
Vestact's 10-year investment performance has a nice margin of safety over the broad index. We are up 18.6% per year after all fees, on average, compared to the S&P 500 which is only up 11.1% on average. It's a been a good run.
In 2024, some of our stocks (like Nvidia) did well, and others did not do so well (like Nike). The portfolio is invested in major US stocks in the tech and healthcare sectors. Over time, we expect our preferred stocks to do better than the S&P 500, with very little turnover.
We don't know what will happen in 2025, but we are still optimistic. We believe that the Fed still has space to trim US interest rates, because shelter (housing) prices will moderate further, lowering inflation. The Trump administration says it will cut taxes, remove regulation and promote mergers and acquisitions. We are excited about the advances in AI and weight-loss drugs. The second half of the 2020s will be good, so we should all be fully invested.
2024 was a big year for electoral upheaval, so there are now lots of new politicians on the job. We make a point of staying in the market when public policy seems volatile.
The main driver of share price performance is earnings, and the good news is that earnings season starts this week! Wall Street currently expects the S&P 500 to report Q4 earnings growth of 8.81%.
We will keep writing our daily newsletter, starting again tomorrow. Our goal is to keep you amused and well-informed, and to share important company updates and market developments with you.
Our business strategy remains the same: we have just one office in Rosebank, offer top-notch service, own large-cap US growth stocks in our preferred sectors for the long-run and charge low fees (1% per annum).
All the best for 2025.
Regards,
Paul