Stock Trading - Entry 51

You know, when I started investing in stocks in autumn 2023, I would have been happy staying in the black - a key reason I am not dispensing financial advise in this or any article I have published to-date on Vocal Media. I simply wanted to dispel myths and in ten years or so have something significant to show for it. Since I was willing to learn continuously along the way, it cost me some time and in this article I lay out whether it has been worth it for me as well as what my medium-term investing strategy will be moving forward.

First up, GICs. I have had three over the past couple years. One was bonds, which has so far netted me an annual ROI well below 2%. I cannot say that was worth it given high interest savings accounts offered by some banks, plus I now no longer understand why people should have bonds in their portfolio, even retirees. The second was a general growth fund which has yo-yoed between -2% and +9%. At the moment it is under 4%. Mediocre performance, I would say.

The third was the market-linked guaranteed income certificate (ML-GIC), specifically a two-year fund in Canadian utilities (my money was locked-in). That netted me a little over 18% over two years. Let's call it 8.6% per year. Decent - but could it be repeated? According to the figures available for an entry on Dec. 9, 2025, it looks like I could only hope to get a similar ROI if I locked in for a full five years.

Newsflash #25: The max rates for ML-GICs have changed a lot since inception and I would not have considered them before late 2022 because the max rate was substantially lower!!

Bear in mind that 55% over five years is only the max. Not the minimum. The minimum would be a paltry 2% (total, not annual). Why consider this? I like exposure to Canadian utilities because they are reliable, stable, and will keep growing since Canada is still a country of choice for immigration so I am sure the immigration limits for the next few years will be reached. Plus many of those companies pay dividends, which can be re-invested (which I happily accepted).

So my next question is, could I invest in that mix myself? Nope. Figuring out how many of each stock to buy to keep a similar weighting for each stock relative to the amount of money I could invest - - please, too much time and effort. Keep it simple. So yes, I have re-invested in this and I will consider that part of my low-risk investments.

What about inflation?

This is actually a good time to get into that topic. My starting point in my current investment journey is actually 2018 when I attended a series of free lectures and basically calculated that if I maxed out on my pension, then I would want $500k in 2018 dollars in the bank to have similar spending power when I retire. (There was a fair amount of math involved in arriving at that amount; simple math, but a fair amount of it. The workbook helped a lot.)

So I started with $360 in 2023. That means, I needed to know the interest rate in Canada for the five years of 2018-2022 inclusive. Fortunately, that is easy enough to calculate without using chatgpt because those high-powered computer servers use a lot of water to keep cool according to this article. I simply went here and eyeballed it (thank you to my father for teaching me precision eyeball estimating). The result:

So, at 15% inflation that means my $360 starting amount in 2023 is worth only $306 in 2018 dollars. And anything after that point? I will keep tabs so I know when I have hit half a mil in 2018 dollars, but for the sake of this article, let's say the average annual inflation rate moving forward will be 2.5% since I am not a doomsayer.

Should I continue to invest in stocks?

Well, that involves counting all the pennies I have shovelled in to my investing account (including the $25 signup bonus from Wealthsimple that you can also get); subtracting any fees as well as losses from sales; and then add dividends, stock loan interest, and profits from sales. Then, I dumped that into a calculator. First, the annual average ROI since the earnings from early on resulted in additional earnings in future years (think earning interest on the interest you have been paid). Second, apply a weighting since the amount I deposited in each year differed greatly (so years I deposited more means the annual rate of that year counts for more than the annual rate of other years). That leaves me with an annual average weighted ROI of just under 18% by my calculation (or 18% per year).

Before you say holy cheese balls, hang on! That is based on the sales I have made (and dividends actually received) without factoring in inflation. Plus, I have not liquidated my entire portfolio; I still own a fair number of stocks. So let's imagine I completely cashed out at the last sale price for each stock I owned on November 20, 2025. The result? Just under 9% overall (again, not factoring inflation).

So short answer: I will keep doing what I am doing. But as I reflect, I have noticed my emotional side at the time I buy stocks - typically during a dip. I hum and haw a bit - because it is in a dip and who knows? So imagine that! When I hum and haw about trying to stay in the black, I get 8.8%. Factor in inflation (8.8 - 2.5 = 6.3%) and that is still good. Running the course, I have earned double that. (Can you tell I have read the book, "Who Moved my Cheese"? It's short, simple, contains absolutely no math, and will indirectly show you how to manage emotions when investing. Go read it.)

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