Over the past five years, the stocks I recommend have only seen a 59 percent increase according to the wiki Global Champions, while the MSCI World index has soared by 88.5 percent. This discrepancy raises an important question: why does my portfolio lag behind the index?
A member of the Facebook group ‚Kleine Finanzzeitung‘ recently posed this query, prompting me to respond there and further elaborate on my blog, grossmutters-sparstrumpf.
Initially, another group member sought input from ChatGPT, but I found the AI’s analysis lacking. It incorrectly attributed my underperformance to specific stocks like Chipotle and Intuitive Surgical, without a full understanding of my portfolio.
Factors influencing stock performance
One of the primary reasons for the disparity is the high fees associated with the wiki Global Champions, which range from 2 to 3 percent annually. Over time, these costs accumulate significantly. Additionally, my personal portfolio benefits from dividends on American stocks, a feature not available in the wiki, causing a further loss of approximately 1 percent. Consequently, while the wiki shows a 59 percent gain over five years, my private portfolio has appreciated by 88.5 percent as of August 14, 2025.
Impact of stock selection
Examining the individual stocks reveals that three major positions, which I sold off last year, significantly hurt my overall performance: Disney, Starbucks, and Nike. These were substantial holdings that I gradually reduced. Additionally, I currently hold two stocks, Novo Nordisk and Chipotle, that are undergoing severe corrections.
Moreover, I have several turnaround stocks in my portfolio—Peloton, Docusign, PayPal, and Etsy—that have shown signs of recovery but remain below initial expectations. I acted too quickly in buying or adding to these positions, leading to a prolonged recovery period that I had not anticipated. If these companies continue to improve, they could yield substantial gains, but the inherent risk is undeniable.
Analyzing specific stock failures
The first significant loss arose from Disney, which I ultimately decided to cut in half early on, reallocating funds to Netflix, a move that proved beneficial. Holding onto Disney for too long did not yield the expected results. Next, Starbucks also contributed negatively, despite my attempts at position reduction and investing in Chipotle, indicating I still remained invested for too long.
Nike stands out as my most substantial disappointment among blue-chip stocks, with a staggering 28 percent decline over the past five years. This situation necessitates a closer examination before I address the performance of Nvidia and the missteps associated with it.
Lessons from turnaround investments
Taking Peloton as a case study, it represents the larger category of turnaround stocks that have improved but not sufficiently to contribute positively to my portfolio. While Peloton is currently up 170 percent year-over-year, I did not purchase it at the right time; I entered the market at a later stage over the past five years, resulting in considerable losses. The stock must reach $11.50 to break even and $23 to match the expected returns of a simple investment in the MSCI World.
Reflecting on my approach, I would opt for more caution in future turnaround investments. My eagerness to re-enter positions led to premature buys in stocks like Etsy, Docusign, and PayPal, ultimately delaying recovery.
The Nvidia saga and reflections on investment strategies
On a more positive note, I am grateful for my investment in Nvidia, which has yielded an impressive return of over 1,500 percent. Had I not made this investment nearly five years ago, I would likely be trailing behind the index in my portfolio’s performance.
However, I recognize that I hesitated too long before purchasing Nvidia. I should have acted sooner, ideally in 2018, when the potential for AI-driven growth was apparent. My cautious approach led me to invest only 1 percent of my portfolio, when I could have allocated more—this conservative choice cost me a significant return.
While I do not dwell on these mistakes, I do reflect on them in hopes of applying these lessons moving forward. Should another opportunity like Nvidia arise, I plan to invest a more substantial portion of my capital to capitalize on growth potential.