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Stock Investment Experience

Hello everyone. A survey in my last post showed that people would like to read about my investment experience. At the moment, my IIS is open 1 year and 3 months ago. I invested 500,000 rubles during this time.

How did I come to the point of investing?


It all started with the thought that life was going on, and somehow I really didn’t really want to work until I was 65. What to do? He began to read books on financial literacy and articles on the Internet. On Habré there is an excellent article on this subject. Then he learned about IIS. In a nutshell, this is a special brokerage account with a tax deduction of 13% for the amount of replenishment up to 400,000 rubles. 52,000 as a gift from the state? Give me two! =)

As a result, I opened the IIS, added 20,000 and decided that I did not know what to buy.

Ruble or dollar?


The ruble has historically weakened against the dollar throughout its history. The choice would seem obvious, but no. Some interesting companies on a global scale are trading for rubles. For example, Norilsk Nickel and his former daughter Pole. So in my portfolio there are about 15% of ruble assets, all the rest are denominated in dollars.

Stock selection or ETF?


Many advise beginners to buy ETFs. Why think and follow the companies yourself if there is an SP 500 index that is extremely difficult to overtake in the long run. But in Russia they are available in extremely limited quantities with high commissions. You need to either obtain the status of a qualified investor or open an account with a foreign broker, but then IIS should be forgotten.

Then I decided to do an independent selection of shares in my portfolio. Why do I need more than 500 companies from the index, if I can try to select only the most profitable and buy only them?

How do I select stocks in my portfolio?


Let's go look at the SP 500 card . Visualization makes it easy to understand which giants in which sectors exist. We write them out and begin to study. I immediately discard all companies that do not pay dividends. If the company is not ready to share profit with shareholders, then it is not interesting to me. I read what the company does on its website and Wikipedia, and for analysis I use ycharts.com . I look at the Fundamental Score, it includes many important parameters, for example, Intel looks like this:


10/10 is an excellent indicator.

And here is AMD:


5/10 which is quite so-so.

Next, I look at a few key indicators for me:

  • Payout Ratio — % . 50%, , , .
  • Altman Z-Score — , . 1,6, .
  • Piotroski F-score — 0 9, . 8-9 .


I adhere to diversification by companies, sectors and countries. The maximum in my portfolio for 1 company accounts for no more than 5% of the invested funds. In total, I have 3 such companies: Microsoft, Visa and NextEra Energy. The shares of other companies are even smaller, I selected 33 in total.
Now it would be nice to verify that I was not mistaken with the choice and compare the results with the SP 500 over the past years. To do this, I used the website portfolioiovisualizer.com. Unfortunately, the free version only supports 25 companies, so the balance that didn’t fit in had to be replaced by an index fund, which is certainly wrong, but I didn’t come up with anything better.





Here it is worth paying attention to such an indicator as Sharpe Ratio. Which of the portfolios is bigger, the better. Hooray, I made up a portfolio that outperforms the SP 500! But unfortunately profit in the past does not guarantee success in the future.

Portfolio


At the moment, I have invested 500,000 rubles and the results are as follows:



Sector analytics should not be taken seriously, since such a company Ecolab fell into the same industry as Norilsk Nickel in the raw materials industry. Where do you think Danaher got to? The main emphasis is placed on IT and medicine. I consider these the 2 best sectors for future growth.

Dividends and taxes


As I wrote above, all the companies that I selected pay dividends. Some do it once a year, some every quarter. For shares of the Russian Federation, the broker pays tax himself, holding 13%. On US stocks, they withhold 10% from me in favor of the United States, and 3% I have to pay the RF myself. By the way, if you do not fill out the W-8BEN form, then you will be deducted taxes from both US citizens at 30%. To pay tax in Russia at the time of filing 3-personal income tax, you must specify each payment. Fortunately, most of the calculations take place on the tax website automatically and there is no need to look for what the dollar rate was on the day dividends were received.

Current affairs and plans for the future


I have not yet received a tax deduction for the last year, as I filed a revising tax return in spring, which launched a check from scratch for up to 3 months. I plan to get this money in the summer and of course I will send it for investment.

What would I do otherwise? I probably wouldn’t sell Polyus shares so early. Since this would give the biggest plus in my portfolio (about + 140%). Now the growth leaders are Norilsk Nickel (+ 52%), Microsoft (+ 24%) and Intel (+ 21%). The minuses are Exxon Mobil (-34.7%), Tyson (-27.6%), Sberbank (-15.8%).

Perhaps that's all for now, I made a plan for myself and am going to follow it for years. The basis of my strategy is “buy and hold”, I hope this year I can better stick to it. We will find out what comes of this in the future. I believe you will have a lot of questions, I am ready to answer them in the comments. Good luck in your investment.

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