Before 2007, I entrusted all my stock market investing to a traditional stock broker. After 20 years, I was shocked to realize that I would have made more money simply keeping my savings in a bank account. That realization led me to take control of my financial future.
By ditching my broker and managing my own portfolio—using online brokerage platforms and the Motley Fool Stock Advisor—I’ve achieved significantly better returns. My portfolio has grown from X to 3X over 18 years.
Who are the Motley Fools?
The Motley Fool is a team of highly respected stock analysts known for their strong track record. Each month, they recommend two stocks and maintain an updated list of their highest-conviction picks, making it easy to invest whenever you’re ready. Their long-term strategy encourages holding stocks for 3 to 5 years or more. Personally, I’ve found that even longer holding periods yield excellent results.
A Smarter Way to Manage Your Portfolio
One problem with this strategy is that stock pickers, the Motley Fools included, often do not tell us, in a timely manner, when to sell. Determining how each tax lot has performed, as measured by the annualized gain over the holding period, is a solution. This allows you to compare with how a saving account grows. If you were to get 4% interest per annum of a savings account compounded annually, that’s comparable to 4% annualized gain. This is not a perfect comparison because typically, savings accounts are compounded monthly. If you are afraid or are not motivated to look at how your investments are performing, then you probably should only buy ETFs like VTI, SCHD, VOO, or QQQ.
My Solution: A Simple Python Tool
To streamline this process, I developed a Python program that calculates the annualized return for each stock lot in your portfolio. Here’s how to use it:
- Set up your portfolio on Yahoo Finance (v2.0 is recommended).
- Track all your purchases and sales in this platform (optional).
- Run my program to see exactly how each investment is performing.
If a holding doesn’t meet your return expectations after 5 years, the data will tell you—it’s time to sell.
You can download the program and follow easy installation instructions here.