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2022 remains a painful year for many investors . In a recent poll, 80% of you said you've seen losses of more than 20%. My own portfolio is down 12% since I started investing two years ago. In this video, I share with you what my stock portfolio looks like and the lessons I've learned . Click the subscribe button for more videos on investments.
Let's start with the portfolio update first . The vast majority of my investment portfolio is in Tesla stock. I bought 1,910 Tesla stocks at an average price of $25 . I started buying Tesla in August 2020 . I've been buying stocks every few months since then , because Tesla stock has fallen 55% this year .
Tesla's share in my portfolio fell from 85% to 77% . At the latest closing price of $180, I now have a 12% loss on Tesla, which equates to a total value of $47,000 . My next biggest investment is Apple stock. I bought 625 Apple stocks at an average price of $144 . I started buying Apple stock in October 2020 .
Apple stock has held up relatively well even during the economic downturn, down only 17% so far this year , which is on par with the S&P 500 . Apple's share of my portfolio has increased from 14% to 21% . At the latest market price of $151, I have a 5% profit on Apple stock, which equates to a total value of $5,000.
The remaining 2% of the portfolio is in genomic stocks like Crispr and Pacific Biosciences, which are down 68% . This is a huge loss. In total, my investment portfolio decreased by 12%, which equates to a total loss of $63,000. Here are three lessons I learned . The first is that long-term investing can seem difficult in the early years because growth is never in a straight line.
There may be times when the stock price falls below your average price due to an economic downturn or other short-term reasons . At times like these, some people ask, "Why didn't Tesla stock sell when it was at its peak price ?" They ask. Yes, some have predicted the market well and made profits , but I believe that predicting short-term prices consistently is difficult and not possible for everyone.
I have confidence in the long-term fundamentals of Tesla and Apple , and I'm willing to buy stock every few months with money I don't need in the short term . In the long run, companies with strong fundamentals will achieve higher value . This provides greater security against future economic downturns.
If you had bought Tesla shares 5 years ago , you would still have a profit of seven and a half times . If you had bought Apple shares 5 years ago , you would still have a profit of two and a half times . In comparison, if you had just bought the S&P 500 index 5 years ago , you would have only made a 50% profit .
My second lesson is to build strong sources of income. Recently, Tesla's appeal as an investment has increased as its stock price has declined by 55% while continuing to grow by 50% each year. As a result, Tesla's price- earnings ratio (PE ratio) has fallen from a high of 1,100 in December 2020 to 55 today.
That's less than Amazon's 87 PE , which has half Tesla's growth rate and six and a half times lower net profit margins. Great wealth can be built during a recession , and investors in Kwan are buying more Tesla shares today. However, not all of us have the cash reserves to take advantage of Tesla's low price .
Like many of you , I see more value in building strong income streams . The majority of my income still comes from my current job . Some of you have additional sources of income in the form of rent from properties you own . Today, I am earning a small income of around $400 per month through my YouTube channel, and I aim to increase it gradually .
I will use it first to buy my dream Model Y car , and then for additional investments . My third lesson is to reduce margin usage. Although I have had positive returns using investment loans on both Tesla and Apple in 2021 , these can be detrimental in a recession when stock prices are falling . Additionally, the risk of a margin call is not worth it, and the peace of mind that comes from not using margin is beneficial to many people .
Stock prices can still fall in a recession, and this puts more people at risk. I am personally reducing margin usage in my portfolio from 15% to 0% over the next 12 months . In the span of just two years, we have experienced the exhilarating highs of a strong bull market and the intense lows of a bear market.
This has truly been a test for us and I believe our experiences will make us stronger investors in the long run . Let us know in the comments what the biggest lesson you've learned so far is . If you found this video useful , please click the Like button . Subscribe for more videos on investing.
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