Amateurinvestor performance more than double S&P index fund in 2020

Portfolio average annual return with trailing 1, 3, 5 and 10 year returns are as follows.

1 year: 37.4%

3 year: 33%

5 year: 27.3%

10 year: 24.5%

They are compared with returns of VFINX, a widely held S&P index fund from Vanguard. VFINX trailing returns are as follows.

1 year: 18.37%

3 year: 14.14%

5 year: 15.18%

10 year: 13.85%

The portfolio holdings, by percentage, as of 12-31-2020 were as follows.

Adobe: 22%

Microsoft: 50.85%

Visa: 26.75%

Cash: 0.39%

2020 was marked by the Covid pandemic. Because of the expected economic burden, one would expect the market to have responded negatively initially, as it did. However a pandemic is an example of the type of crisis which would be expected to be transient, and therefore might provide an opportunity to buy good companies at a relatively low price. The market would be expected to return to trend once the crisis was seen to be abating.

However that is not why Amateurinvestor outperformed the broad market yet again. I am virtually fully invested all the time, so had little new cash to invest. The reality is that Visa, Microsoft and Adobe play indispensable roles in the digitization of economic activity on this planet. And the pandemic compelled an acceleration of the secular growth of digital transformation, therefore these three indispensable companies continue to grow.

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