There’s no better way to close out a year than with a good review. You can envy the stocks that doubled, while cursing the commenters that kept you out. You can mock the stocks that halved, while forgetting they’re still in your kids ISAs. And, of course, you can dream how much better off you’d be, if only you’d not gone to cash in your mid-year panic.
So let’s dig into the stocks and stats and cut ourselves some slack. Investing is joy, regret and humour all at the same time. A tragedy and a comedy, with the endless promise of doing just a little bit better next year.
The numbers tell a story
2024 turned out to be remarkably... normal. From the 1st January to the 20th December, 90+ StockRank stocks returned 11% before dividends, which is right on their long term average. Add an average yield of 3.9%, and they generated a 15% total return. That’s good going in what were tough UK markets (the average price of all UK listed shares above a £10m market cap fell by 2% this year).
Good stocks climbed a wall of worry, while junk stocks took a battering. If you want to know why I never buy stocks at less than a 50 StockRank - the chart above explains it well. I really don’t fancy losing up to 32% in any year.
As they say, there are lies, damned lies and statistics. So let’s review a few more. If you picked a 90+ ranked share in 2024 you had a 57% chance of picking a winner. That’s not bad at all, but it’s also not great. In 2014 picking winners in the 90+ bucket was like shooting fish in a barrel. I drew 19 out of 20 winners that year. Let’s hope for a repeat in 2025.
We can line up the returns of all shares with a starting StockRank of 80 and visualise the distribution of winners and losers. As you can see below, there were a few shares with higher ranks that lost more than 50% in the year, but many more that gained 50-150%.
Contrast with stocks that had a starting StockRank of 50 or below. If you bought these you really were playing with fire. Two-thirds of these "story…
