Thanks for the updates everyone, and congrats to those with the impressive returns.
"Any further thoughts re your long term investment strategy as the year has gone on?"
Just as "one swallow does not a summer make", one year in which you all post a higher return than me does not make your strategy of speculation better than my strategy of long-term buy-and-hold investment.
The principle of buying index funds (and this also pretty much applies to the LICs I've chosen) is that investing long-term in the stockmarket in a zero-sum game (i.e. every 1% by which you beat the index is 1% by which someone else underperforms the index). In fact, when you take into account brokerage, CGT and other fees, investing is a negative-sum game (i.e. on average, everyone underperforms the index slightly). Investing in an index fund or very diversified low-cost LIC is the only way to guarantee your fair share of market returns year in, year out. When you own an index fund, you realise that around 50% of market participants will outperform you each year, and 50% will underperform you. But over a longer period (say, 5 or 10 year), the proportion of people who beat you becomes smaller, and the proportion of people you beat becomes larger.
So while you have all done very well this year, there are other people out there who have underperformed the index by significant amounts. And as the years go by, it becomes increasingly difficult for you to avoid becoming one of them and losing a good chunk of your previous profits. As Buffett says: "anything multiplied by zero is zero". Of course there are people out there, like Buffett, who can beat the index reasonably consistently over a very long period of time, but they are few and far between, and after just 1.5 years of our competition, I wouldn't be betting on any of us being the next Warren Buffett!
Anyway congrats again on your successful performance this year. I'm certainly happy with how my shares have recovered post-GFC, even if I didn't score any baggers!
