Chan's Personal Blog

The third International Bank of Chan Fund stock market challenge has finished and Adam has emerged as the victor. Congratulations!

The contest involved investing money in the stock market from January to April. Each contestant was given $10,000. Here are the final results:

Rank	Name	Networth	Return
1	add	$11,869.39	+18.69%
2	Pirate	$9,604.05	-3.96%
3	Chan	$7,439.32	-25.61%
4	Cwing	$2,616.11	-73.84%

We used the Dow Jones Industrial index as the benchmark. Between January to April, the Dow rose by 19.7%. This means if you bought every stock in the Dow, you would have made 19.7% return on your investment. So, congratulations are in order to Adam for pretty much matching the market's return. The rest of us didn't do so hot.

I interviewed the champion and asked what his strategy was for the game. The key to his success was holding stocks for the long term. His portfolio was resource heavy as he invested primarily in copper and concrete companies.

Those of us who actively traded stocks (ie buying and selling stocks rapidly) got absolutely hammered. I tried the active trader game this time around, and that strategy totally didn't work out. I strayed away from my traditional strategies and rules, and I lost quite a bit of money doing that.

The fourth International Bank of Chan Fund challenge starts again this Monday, and you can join us.

For this round, I'm going back to the basics:

1. Diversifying the portfolio, ie buying stocks in at least 5 different sectors.
2. Buy and hold for the long-term.
3. Only 20% of the portfolio can be high risk, speculative stocks.
4. Don't buy during before earnings reports because it's too unpredictable how a stock will react.

We'll see how it goes this time around.