139 - The S&P Was Up In 2025… So Why Didn’t Most Investors Win?

2025 looked like a great year on paper — but most investors didn’t experience those returns.

In this episode, we break down what really happened beneath the indexes, why passive investing masked widespread underperformance, and how a dividend-first, total-return strategy quietly outperformed the market.

We walk through:

• Why the S&P 500’s gains were driven by ~7 stocks
• Which unexpected sectors crushed it (utilities, REITs, commodities)
• Why many “obvious” AI and tech plays underperformed
• The biggest winners, losers, and surprises across 46 real holdings
• How dividends changed the math in flat and down positions
• Why total return matters more than price return
• How we rebalance without chasing winners or panic selling
• What these results mean for positioning in 2026

We also explain how we track everything manually using spreadsheets, why DRIP isn’t always your friend, and how income investing reduces emotional mistakes when markets get choppy.

If you care about real performance, not marketing returns, this episode will change how you look at your portfolio.

Questions? Email Tim at debrine9@gmail.com

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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

Episode music was created using Loudly.

Transcript

Welcome to roaming returns a podcast about generating a passive income with dividend stocks so you can secure your finances and liberate your life. 
Most people look at 2025 and think, “The market crushed it.”
But the reality is, if you weren’t in a small number of the right stocks, you probably didn’t.
In this episode, we break down what performed well, what didn’t, and why headline index returns are misleading. We go over 46 of our portfolio stock results showing how total return tracking and contrarian rebalancing beat chasing hype.
And because our strategy worked so well, guess what, we’re implementing this exact framework for 2026. 
All right, we are recording. All right, we back. We back, y'all.
So what I was doing, like, this podcast is basically going to be a, like, a review, not a comprehensive review of 2025, but, like, when I was doing the spreadsheets for the end of the year, I came across some interesting tidbits. So that's what we're going to do. So in 2025, the Russell 6000 returned 8.69 percent.
The S&P 500 returned 15.60 percent. The NASDAQ returned 18.36 percent, and the Dow Jones returned 11.87. That was through January 2nd or 1st. I don't know.
Do you need a date thingy? The 2nd? The 2nd, yeah. Okay, because that was the Friday the markets were actually open after the new year. So when I was going through the portfolio, we came across some, we had some surprises that actually were returned more than the market did last year.
Like AGNC, for example, it returned over 32 percent. If you're not familiar, AGNC is a mortgage rate. Mortgage rates were supposed to be bad last year, but AGNC, like, killed it.
Now this is total return. Like, I don't do, like, the price return. We said before that the dividend stocks are a lot harder to do in apples-to-apples comparison for the markets.
So those of you who know anybody that does the index fund route where it's that average of 10 percent gain per year, that's capital appreciation based on the value of the stock going up. So total return is that value going up or down plus the dividends that go in that you get paid out. Yep.
And like one of the aspects that I think we should mention right off the top was in 2025, I think it was 50-some percent, 53 percent of the returns, 53, 57, something like that, of the returns of the S&P 500 was due to 7 stocks. And if you actually break it down further, you look at the total number of companies in the S&P 500 that actually were positive in 2025 as opposed to negative. There was more stocks that actually lost money in 2025.
But the market as a whole looked like it was up really well because of seven heavy-duty stocks. I know we've said that before. But that, like, just getting clarification, like the numbers vary between, like, some publications.
But, like, overall, like, there was more stocks that lost money in the S&P 500 than gained money. So basically, if you wouldn't have been in an index fund, your probability of finding the right stock that would have a positive year is harder. It's a crapshoot.
Yeah, it's a crapshoot. It's less. So that's where index fund comes in good if you don't want to actually, like, dig through, like, all the data and stuff.
Right. And that's the same concept of the funds. So, like, the nuclear one we were talking about last night on the livestream is the same concept.
If we would have tried to pick the right nuclear stock, that would have been a lot harder than just buying into a fund where the people are, like, the experts are trying to figure that out and having a whole bunch in that fund. Right. So, like, there's no surprises on the good.
Like, the good portion of our portfolio was the stocks that we own in either portfolio that returned more than 20%. The only surprise really was AGNC because it's a mortgage REIT. Mortgage REITs shouldn't have done that great.
Like, ABR is a mortgage REIT. ECC is a mortgage REIT. NLY is a mortgage REIT, and they didn't return 32%.
So, and medical properties, MPW returned 34.68% in 2025. That one shocked the shit out of me. Right.
Especially since we were so far down in it, like, as a whole since inception for us. And one of the listeners last night on the livestream said that they're up 26%. 36.
36. 36% since we were talking about it last year. So that's good that some people listen.
Yeah. Well, got in at the right point and did write it down like we did. So that was good, good.
So that one surprised me. Other than that, I'm not too surprised by any of the good. Like, we have a couple of utilities.
ES was up 21%. BKH was up 23%. So that's kind of comparable.
Like, a lot of the utilities were up, like, between 18% and 24%. So that, like, that fits into it. Which is a lot for utilities.
We had a gold closing to fund GNT that was up 49%. So that's not surprising given that gold was up so much last year. We had the tech fund, NBXG, was up 23%.
That shouldn't come as any surprise because the Nasdaq was up 18%. So NBXG holds a lot of what Nasdaq, like, a lot of tech companies. So that being up there.
UAN, which is the fertilizer stock, was up 50.61. Damn. As we have to actually supply more crops for people, it should be no surprise that fertilizer actually had a good year and it's actually up quite a bit already in 2026. Starbuck, SBLK was up 30.5%. That's, like, a shipping stock.
So that, because everything costs more to ship, they're going to jack up their prices. So it wasn't a surprise. BTI, because everyone's feeling the, BTI is a tobacco stock, everyone's feeling the pinch of the market.
So, like, they're going to do their vices. So whether it's drinking or smoking or whatever. So BTI being up 64% wasn't very surprising.
Wow, that's huge. And then you have another closing fund that we own, AEF, which is Emerging Market Without China was up 40.48%, which, again, shouldn't be a surprise because Emerging Markets did so well. 43, not 40, 43.
Can't read your own numbers. Because Emerging Markets did so well in 2025. And then we have Vail, which is iron ore, was up 56%.
That's cool as hell. And then Stillwater, SBSW, was up 332%. Okay, talk about that one because 332% with Stillwater.
Let's recap. It's a mining stock that when we got into it was like $2. It was like in the low end of the penny stocks.
It's one that we've held previously. And I know just based on the revenue that it should be trading about $20 a share. So the fact that it was at $2, it doesn't pay a dividend currently, but it did pay a dividend before at the price tank.
So we got into it at $2. So if you think $2, you think 332% is a lot of return. Well, it is, but it's not because it started at $2.
So it went up to like- Yeah, percents are misleading. So it went up to like- Well, not misleading. $8.
So $8 would be 300%. Not misleading. They do a number on your brain because you're like, how is that little bit of a thing that big of a percent? Well, that's why people have an appeal with penny stocks, because if you can find something that's a good company for $2- They don't have to move very much to really hit those high percents.
It goes up to $10, that's a 500% return. And that's one of the reasons why we don't like the really high pricey stocks, because $1,000 stock takes to do that same 300, it would have to go up to 3,300. For example, MMM, Triple M was up 26.4%, and it had a banger year in 2025.
It went up from, I think it was like $88 to $92, and it went up to $140, $160 at some point. So even then, it still was only at 50% to 60% return. So the higher price the stock is, the higher it is to get a ridiculous return.
Yeah, because it's a percent base. You're starting to see that with NVIDIA, because it's $200 a share. So when it has a really good few months, it's only up 20%, and that's $240.
The really good example would be Bitcoin, because Bitcoin is so high value, or high price, that it takes a lot for that thing to swing. When it does, it's a couple of percents. It's dropping massive amounts.
I think the best return we got in one of the high yielders that we did was NVDW. It was up 118%, and PLTW was only up 30%. So NVDW outperformed PLTW by a significant margin.
No surprise, because that's based on NVIDIA. Palantir had a better year than NVIDIA, so that's shocking that it was that big of a deal. That's a pretty big difference.
That's like four times the amount of money in NVDW. That's from the beginning of the year, like we were in both of them. I have been in those for the most part since they came out.
Well, that is interesting that it's that much of a difference. So that's the ones that overperformed the market. The next chunk, we have the ones that were in line with the market, or a little bit less, but they still had a positive return.
Here, AIPI was shocking, because it was only up 12.67% when AI was all the rage. FEPI, which is basically the FAANG stocks and the REC shares, was up 14.85%. That kind of correlates with the S&P 500, but not with the NASDAQ. And the NASDAQ actually, I think, has more FAANG stocks than the S&P.
So that was a little bit depressed. It should have been up higher. JEPQ, which is pretty much all technology companies, was only up 13.75%. And again, the NASDAQ returned 18%.
So that should have been 5% higher. You saw BTI returned 60-some percent, and MO, which is another tobacco stock, only returned 18.15%. So what's the difference between BTI and MO? Well, BTI has more international exposure, but MO is a better stock, but it didn't return as much. Didn't they expand out into chips and stuff, too? Or was that BTI? MO is like a snack.
No, it's smoking with a lot of vape and tobacco, those num-nums. Num-nums, tins of stuff. I don't think BTI has that BTI.
You weren't holding your stock up with your habit. Get worse. Oh, I'm a horrible spokesperson.
Yes. Get worse. He's actually trying to minimize down.
Maybe you're the one hurting the stock price. I wonder if they'll actually sponsor our videos and we talk to them. Like, hey, man, we use your product every time we're recording.
There's no we here. There's you. Well, that's my freaking nicotine gums.
I should look into that. And another one that was interesting was XYLD, because they literally hold the S&P 500 stocks and write covered calls on them. But it was to be expected, because when you're writing a covered call on a stock, generally the upside is minimized.
You're not going to get as much upside as you would if you just held the underlying stock. So that XYLD was up 10% when the S&P was up 18%. I would think the XYLD should be up a little bit more, but that might be a correlation to the fact that the S&P had so many stocks down.
That's why XYLD's return was depressed a little bit. That's still in line with the average 10%. PDI, which is a bond fund, was up 10%.
That was pretty much all dividend capture for that one. So I think PDI is going to have a pretty banger 2026, because last year the yield on PDI is 14%. So it actually lost 4% in price.
Well, I was just going to say, we were looking at a bunch of different funds last night, and a couple of them have bonds in it, and they were down significantly. So if PDI actually had a 10% return, that's really good by comparison. And then we had BME, which isn't a surprise, because the last time the regime was in power, BME did really well, and it was up to almost 17%.
So I think it'll probably replicate that in 2026, because that one does really well whenever you have people in power that want medical stuff to be, for lack of a better word, not patrolled as much. There's less regulation on it, so they're free to just make money. And ADM was up 16%, and that's a corn stock, so that goes back up to the whole, we have to feed all these people, and so that makes corn syrup and corn things.
So that one was up 16%. The one that shocked me on this list was that ICON was up 10% last year, but that was, again, that's misleading. If you hadn't been in for the fall.
But it's misleading, because it was up 10%, but the yield's 24%. So it was actually down 14% in price, but it recouped that with the dividend. That's why I think total return's a better measure for what we do as income investors, as opposed to what people do for growth investing or momentum trading and things of that nature, because I'm more interested that, and I've talked about it before with the yield cushion, or the yield, what do they call it? We call it the yield protection.
Yield protection or yield cushion, where basically you want your yield to cover your potential price depreciation so that you still make money in the year. And a prime example of that would be AAPW. AAPW was only up 4%, and that basically, that's kind of in line where I thought it was going to be, because I still don't really trust that one when it comes to the round tail for Apple.
I think it yields 26%, so it actually depreciated quite a bit in price, but the yield protection, I theorize, I hypothesize that the 4% is 4%. I think ICON, honestly, is the best example of actual stocks though, because that thing went down to hell. And then we had QQQI, which is very similar to JEPQ.
QQQI returned 16.5%, whereas JEPQ was only 13.75. They're basically the same thing, so why is QQQI outperforming JEPQ? I don't know. I have to dig into that more. What this is doing is it's giving you an idea of what to look into more.
Why is JEPQ ran worse than QQQI? Does QQQI have a different strategy that they have exploited that JEPQ must catch up to? So I have to dig into what the difference is between those two. One I'd like to mention was EPD was up only 9%, but because the price of crude went down so far, this is why we actually recommended midstreams, the ones that transport and store oil as opposed to exploring oil and being so dependent on the price of oil, because EPD at 9% and it only has a 6% yield, so the price actually went up 3%. That's really good, because what was oil in general? Oil was down 27% last year.
That's huge. Up 9% versus down 20%. Huge.
I like that one. So that's that column. You didn't talk about AB, did you? AB is a financial services.
It's a weird one. It's in the BDC category, but they actually don't supply money. They don't lend money out.
They actually provide financial services to people. But I think AB did a dividend cut, and even with that dividend cut, it was still up 14.73% total return. Yeah.
So I actually like this list. The next column is the ones that actually were below average, but not quite so bad that I had to say, oh my God, but they're pretty close. They're coming.
We have an oh my God column. Fisker Capital was down 19%. So right now, the yield on Fisker Capital FSK is about 19%.
So if you had another year like last year with Fisker, you'd probably break even. So that's one to look at. IIPR was down negative 17.5% last year.
The yield on this one's only in the 14 to 15% range. So if it had a replication of 2025, you're going to lose money in this one in 2026. KMB was down 18%, which is crazy for a dividend.
I want to say king, but it might be just aristocrat. I don't remember the exact number of years, but like a prime example of what we were just talking about with EPD, EPD like transports and stores. KRP is one that basically they have royalties on all their oil fields, and they were down 17.7% last year.
So they're very dependent on the price of oil as opposed to EPD, which is not, they still make their money whichever way. And that's kind of like whenever you- I thought KPD would have been, or excuse me, KRP would have been very similar with just getting paid regardless of what was happening to the actual price of oil because of the royalty. I guess that was weird that it was- Yeah, that is weird.
So I'd be curious, what the hell happened with that one? That should have been more in line with what EPD did. And then UPS was down 16%. So that was garbage.
Pepsi was down 1.6%. So that was not ideal. But again, Pepsi's yield is like four or 5%. And speaking of Pepsi, just today in the retirement account, I actually took profits on ASTS because it's super elevated.
It's at like $90 a share. So I took a few hundred dollars off of that. And PLTR, which is up to about $180 per share, I took a little bit of profit off that.
And I poured it into Pepsi because I like the fundamentals of Pepsi and the fact that it was down. I think it's going to be up in 2026. So I'm going to gradually dollar cost average down in that one.
Well, are we doing something similar with the rest of these? I think when we did the 2026 prediction, you said IIPR is likely going to have a turnaround because of the- Because they're not legalizing marijuana, but they're decriminalizing marijuana. Decriminalizing. That was the word I couldn't think of.
Decriminalizing it. So I assume that one's going to bounce back, if not at least break even. I don't know about Fisker, but I assume- Fisker, it's interest rate dependent.
And it had a very bad earnings report, the last earnings report. So it'll turn around. It's like one of the ones I think will probably be, you'll probably, if you got into it right now, you'd probably make- And Kimberly Morgan.
At least 15% this year in Fisker. Oh, no, no. What did you say Kimberly Morgan actually does? They do like- Berkshire Hathaway? No, it's like they use like toilet paper and huggies, diapers and shit.
Oh, so like essentials. It's a consumer staple. And I think that one's going to turn around just because it's a consumer staple and like people are kind of feeling pinched, like a large portion of the population is feeling pinched.
So that's going to, the margin should return in that one. And the last one is WLKP, which was down 12.4%. That's just a chemical play. Like they put the chemicals in styrofoam and paper and packaging and stuff.
And I think the more that we consume, the more chemicals will be used. So I think that one should be okay in 2026. And then you get to the just downright shitty ones.
Like these ones did really bad in 2025. First is Skyworks. It was down 26%.
And it's currently, I just looked at it. It's down 7% today. And that's because there's talk of a merger with Corvo for like, basically, they're just going to solidify their moat when they merge with Corvo.
That should be completed by first quarter of 2027. So this one, they're strengthening their moat. So I think it should be okay.
The yield is like five to 6%. So I think this one will be pretty good. Opera is another one we just got into because the price was just too cheap.
Opera was down 21% in 2025. And like, I think it'll probably go up 21% in 2026. Opera really performed in 2024, didn't it? Yeah.
Not as much as that loss was, but it was like 15% in 2024. I just like it. I think you'll make money in that one.
Civi, what I'm starting to see with CIVI is that it's really dependent on the price of oil. So like as oil turns around or stabilizes, this one shouldn't be down. It was down almost 37%.
I still like it. I have my drip on. I'm accumulating shares because I know the price of oil is going to go up at some point.
And when it does, this one should pop off. ABR is another mortgage rate. We were talking about how AG&C was 31% of gain.
Well, ABR had a 34% loss. That all stems from an earnings report where it showed that they actually had to borrow money to afford their dividends. So this one, they just cut the dividend and they did a piss poor job of it.
They did a piss poor job. What's the analogy? Like whenever you have a dividend cut, you want your managers or your CEOs to be like good carpenters. You measure twice and you only have to cut it once.
So the fact that they might have to cut it a second time, they got really punished. Camping World was down 50.8% and that one should come as no surprise. That one just seems to go down.
That's our worst one of the whole portfolio. The fundamentals are there and the metrics are there. It's not going to be down 51%.
Refresher, they went on a buying spree and every freaking used RV dealership in the country. So their debt exploded. Exploded.
And when people do that kind of stuff, it takes a long time for them to actually get back into the breakeven. It's like starting any other business. It takes three years.
This one might take several years. We're down so much in it. We're kind of just going to see what the hell happens with it, I think, is what we decided.
LYB was down 34.5% and that's another chemical company. There's not going to be a repeat of that in 2026. But this is also one of the dividend growers, right? LYB? Yes.
And the next one's a dividend grower too. Target, TGT, that was down 25%. Both of those, I think, are pretty safe that they won't be that bad in 2026.
So again, strategy with those is while they're depressed, you just kind of turn a drip on and dollar cost average that share price down as much as you can so that when it takes off, you're up way faster, way further when it does turn. Even if it doesn't get back up to where it fell from, you'll still probably be up. You should be up because the yields are so high.
LYB's yield is like 12% and Target's is like 7%. Historically, Target's is historically between 3% and 4%. So you can tell how undervalued it is just based off its dividend yield.
And LYB is generally between the 7% and 8% range. So again, at 12%, you can see that it's very undervalued just based off its yield. And UPS, Kimberly Morgan, and I actually Pepsi all fall into that category as dividend growers.
When I was looking through this list, one of the things I found most interesting was just the sheer amount of big names, big money stocks that underperformed. We've mentioned them all, KMB, UPS, WLKP, PEP, SWKS, OPRA, LYB, and TGT. They're all huge companies that don't necessarily see drawbacks like this very often.
So it presents you with a perfect buying opportunity because you know that these are large cap companies with a shit ton of revenue. So the fact that they're depressed as much as they were in 2025, now could they have a 2026 be down as well? It's always a possibility. They could.
You can't guarantee stuff, but I'm willing to take the chance on companies that are making one to $5 billion a quarter in revenue. I'm willing to take that chance. A lot of those, again, are dividend growers and they have that reputation to uphold.
If they're in king status, they're going to do everything possible to keep that dividend. And because there's so many people doing the dividend grower investing strategy, I really don't think they're just going to bounce back eventually. If you look at Coke over the 50 years or whatever it is, they just do what they do.
And when we had the interest rates climate that we did, I could see these guys doing some accounting or whatever and moving around debt and doing certain things to look negative before they go positive. Every business is much like a household. Whenever you have debt at 7% and there's an opportunity to get debt at 5%, you're going to restructure your debt to save 2%.
It's just like tax loss harvesting. You lock in a loss for the one year to basically be up later. So it's probably tax incentive.
So it's just, again, it's one of those fiscal calendar thingies. So the point of that first point was that you have a slew of good buying opportunities. You just have to look and not be scared to pull the trigger.
You know that the companies are good. You know the companies make money. Don't be scared to actually buy into them just because they had a really, really bad 2025.
The second point that I came up with, we mentioned, we touched on it, was to see on this list is not a surprise, but to see MPW and IEP having such positive years as a pebbit, it shocked me a little bit because they've just been down, down, down, down, down every year. So kudos to the person that actually made money in MPW because we have not. We're not back up yet, but we rode it down from that.
But I still like MPW and IEP. Obviously, I still like Camp Hero. We hold them for a reason.
Right. It's not just because we're down. Because they're turning around, though.
Because I see the division and all the while they're down, they all pay dividends and you get a lot of shares. We got the last dividend for Icahn, we got 15 shares tacked on. The last dividend for MPW, we got 18 shares.
And the last dividend for Camping World, we got, I think, two or three shares. Yeah, that one doesn't matter. It's such a low yield.
I know it's contrary to what all the experts and publications say. You put stop losses on things and when you're down 25 percent, you get out of it. But I'm OK with if a portion of my portfolio is in laggards.
And I've been in laggards, but I'm seeing the share compounding as well as the financial strengthening. I'm OK holding stocks that are down more than 25 percent. Most of the people that get interviewed that are the really good investors, they talk about when you go to the end of the year and you look at your portfolio, whatever your laggards are, you take your winnings from your winners and put them into your laggards to rebalance your portfolio.
That basically creates that natural reallocation of contrarian events thing. Like Ray Dalio, ICON is one of them, even though he actually has his own stock, but he was one of the people. One of the best books, if you actually want to listen to a lot of what they said was, oddly enough, Tony Robbins' Money Master the Game.
Huge book, but if you want to just listen to what the experts' perspectives are, there's like a section in the back that is literally interviews with all of the big, all of the big people. I think Buffett's even in there. That was a great section to read for just like their thought process on how they invest.
So then another interesting point in the reviewing of the portfolios was just the amount of diversification that actually occurred in the over-performers. We mentioned at the top, and this has actually happened for a couple of years now, like the markets have been super strong because of like seven to ten stocks, but our portfolios actually show a lot of return from a lot of different sectors and a lot of different investing strategies. Like I don't know, very few people pull the trigger on like those round-tail things, and like they've done quite well.
And you also saw like an Emory, which people avoided. You actually saw REITs, which people avoided. You actually saw oil companies, which people avoided or sold out of.
So like there was a lot of return from a lot of different sectors that people like were scared to invest in or scared to hold money into. So they sold at a low. Thank you.
This is obviously not the whole list. It was just like some of the main ones we have like between the two portfolios. We hold probably 70-ish stocks, and it would take us like forever to go through every return.
So I just pulled out the main one. But one of the things that I mentioned at the top, and I'm going to reiterate right now, is what a lot of financial publications do is not how I would actually, as an individual investor, do things. When you look up a return for a stock, generally, you think the return includes dividends.
But it really doesn't. Like in Yahoo Finance or CNBC or these other funds, they just look at the price appreciation or the price depreciation. They don't actually have a total return metric.
So you kind of have to do that yourself. And I actually found a really good way to do that is if you have access to Google Sheets, you can actually just create equations in there using Google Finance as your benchmark. There's a cell thing where you can go to Google Finance.
You can get the day-to-day price of a stock. You then would go to Google Finance. You get the amount of dividends they paid.
So the basic equation is you take your current price plus your dividends minus the January 1st price and then you divide it by the January 1st price. It's a pretty simple equation and that's how you get your total return. But it's the same equation if you would be doing the capital appreciation you just have to add dividends into that because it's part of the equation.
Because as income investors like we're not as concerned with price appreciation or depreciation like we sure we'd like to see our portfolio balance go up with price appreciation. We're actually more invested in the returns which actually includes dividends. Well for example somebody who's in stock A at say $10 and it goes up to $20 that would be 100% gain.
If we had a stock that was $10 and it paid out 100% gain for the year and stayed at $10 it would still be generating 100% at the same value. So in your portfolio if you use the capital appreciation it would look like you had a 0% return but you'd actually have the same return at 100% because of the dividends. And the other thing that we preach over and over again it depends what you want to do with the money.
If you have 30 years until you're going to tap it that 10% capital appreciation would probably incentivize you because it's not taxed because it's not like what do they call that paper it's paper gains. It's not actual like realized gains because you haven't sold it. It's not actually capital gains yet because you haven't sold it.
So you have no tax. But it's potential capital gains. That's how they phrase it.
They call it unrealized gains. But the dividends do actually become a taxable but would you rather have the money now and be able to live off of it or wait 30 years at a job you hate and this is most people's situation. If you love your job then it really doesn't matter.
But if you're one of the people that like you're running the wire or like my friend works at the post office and because of Amazon and like UPS and stuff they're losing a lot of their business. So they're cutting back their wages and she's been like oh my god what am I supposed to do. So she's actually jumped into this round hill strategy and she's like she sent a text this morning saying how grateful she is that we taught her this whole strategy because it's actually giving her peace of mind when she should be having 30 packages delivered a day and she only has seven.
Like that's huge for her to have that like thing. So it's just the different strategy. If you want that capital appreciation that's fine and this is why it's hard to do the apples the apples thing.
But you never have to sell the socks with the dividend approach. That's why we like when we first started this journey like the thing that I was encountering a lot was to fund retirement they recommended small dividend stocks but they recommended withdrawing money every year which means you have to liquidate some positions. Whereas if you actually retire with dividends which I mean there's other ways to do it, other podcasts, other YouTube videos, other experts that will actually talk about retirement dividends.
To me like it's just like logically it makes no sense to me that you would actually withdraw. Sell your assets. And sell your assets.
You have fewer assets for like later on in your retirement as opposed to just setting your account up or your like your dividend and your income that you make from holding companies paid for your lifestyle and you never have to touch your principal. Like it never made sense to me why people would sell when they don't have to. When they don't have to.
It makes sense if you don't have the dividends coming in you have to sell off those chunks of the portfolio. But why would you construct a portfolio that way? I don't understand. Especially when you have a massive unknown with not knowing how long you're going to live.
Not knowing how much price cost is going to be in 30 years. Not knowing what tax rates are going to be in 30 years. Not knowing like what your health situation is going to be in 30 years.
Like you have no clue. There's so many unknowns in that equation and that to me like why would you go that approach if you could go the dividend approach and literally make all of those unknowns irrelevant. And that's why like to circle back to what my point was like that's why we do the income investment but you have to have the total return because you're actually focused on quarter to quarter or month to month income appreciation not price appreciation.
Right and that's why we said that doing a comparison with the actual S&P returns and all the other stuff is not really apples to apples. So this is the attempt. I was wondering I know you said this wasn't the whole portfolio but I was wondering if we could just pretend like we had equal allocation in every one of these adding it up and seeing what the total return would have been.
Could we do this? I could do this right now. You do I keep talking. I need my phone though it's in that pile of crap hold on.
But just for shits and giggles because you said most of the other ones were like average. They're average yeah. So we can assume that they're zero like a zero.
Well yeah I just impact. This is going to be this is going to return above. Above the above the average I can.
That was my point. Just tell. But that was my point because we had so many more in the thing you can keep talking.
I'm going to like the next point that I came across and I think I have to I think I've mentioned it previously but I'm not sure I think I have to reiterate it if I haven't or if I have but if not this is new to everybody. What you can do whenever you construct like your end of end of year review like this is you can like look at things and be like okay well triple M was up 27 percent BTI was up 64 percent. Like I understand they say let your winners run but like they don't like that the second half of that they never say chase winners don't don't chase winners.
So if you have winners it's okay to let them run like we didn't we took our initial investment out of triple M so like if triple M continues to run the shares that we have that are like basically free. But again you never know if it's going to run or not run. So if you go back to our whoopsie daisies for years.
What I'm saying though is it's okay to like let your run run your winners run so long as you withdraw your initial initial investment out because then it doesn't really matter. It's all just like free and clear. But I was going to say that during our whoopsie daisies we've had equal instances where we stayed in and it went down and we had other instances where we got out and it went up.
So the solution to both of those scenarios since it's another unknown variable you never know where that thing is really going to go. Some winners run and some winners literally pivot back down to where they started. So the best strategy what Tim just said is literally take your initial off the table and let it go because then it doesn't matter if it goes up or down.
And if it goes up you're not butthurt that you missed out on it and if it goes down you're like okay. Well the second part of that point though is don't chase winners. So like you see that BTI is up 64 percent and you're really interested in the tobacco sector.
Knowing that BTI returned 64 percent last year would make me very hesitant to invest in BTI whenever I have Mo Altria that has like a 10 percent return. Right. So don't chase winners and this actually just helps you with like a visual representation of what not to chase.
So like if I had money I would literally not even look at the good that was over 20 percent or the average which was up to 19 percent or I would start to look at the below average the ones that have like a negative 12 percent return or the ones that were just really shit the ugly which I said was negative 20 or greater. I think the probability wise like the probability if you invested in BTI as opposed to Altria because Altria gained 10 percent. BTI gained 64 percent.
They're about the same price. They have about the same dividend yield that the probability of you making more money in BTI than Altria is smaller just because of the historical data right there. And you can even go a step further and rather than invest in tobacco at all why would you could look down there at the bottom like oh well Kimberly Morgan was down like 18 percent or 26 percent whatever it was.
I could put money into that one. That one makes a lot of revenue. The probability of a stock that performs like a dividend stock dividend growth stock that was 64 percent return as opposed to one that was a negative 20 percent return.
The probability of you making more in BTI is much smaller than it would be if you invested in KMB or probability. It's all probability based. Well and it also goes back to all of those experts from the Tony Robbins book like no joke no joke.
Every one of them talks about when you reallocate your portfolio you take your winners you take the winners because they're over allocated at that point they're higher valued and you dump the difference from your original like breakdown of say five 25 percent 25 percent 25 percent 25 percent. Say you had two to one up to 50 and then the other two drop down to like significantly lower. Obviously that math doesn't work out.
But you get my point. Take the part above the 25 off of those and you dump it into the ones that are down to rebalance it back to the 25 25 25 25. That is literally the same thing as contrarian investing because you put money into the under valued sectors or undervalued portions and you actually take the winners and take off your winnings just like Tim said.
So we're breaking that strategy down to an individual stock basis where you take your winners off the table but you let that rest run and you put money into the ones that are like the losers essentially. But the other key is like that's how you don't chase your winners. Chasing your winners is dumping other money into the ones that are already winning.
That's the opposite strategy of what literally all the experts excuse me I shouldn't say experts because they're the ones that are reporting on the stuff the actual like Buffett's the icons the Ray Dalio's like they're very successful investors. The successful investors that the like the the icons I guess which we should actually call them the icons of the freaking investing realm because those are different than the expert because the experts are just the the news puppeteers essentially trying to drive the opposite in my opinion. Like if you look at everything that happens it's like they're trying to get the herd to do what they want to do to put money in their pockets.
Another point that along the same theory I guess would be like it's very essential to know macro trends. I know it's boring. If you don't want to do the research just listen to him because that's what I do.
It's a pain in the ass to try to identify like where we're going. Yes. But like if you know like say for example last year gold was up 80% the probability of gold being up 80% again is not.
Is low. It could but it's low. So I wouldn't actually over allocate into the gold in the mining sector just based on like 2025 was such a banger year.
Now obviously it could so I wouldn't say avoid the sector completely but I would if I had $10,000 I'd put less than $1,000 into a sector that over like over performed so high that's like a 60% over performance in the gold sector. Again probability wise you look at other stocks that have done that most of them come back down to earth. So just knowing the macro trends is keeping up with macro trends like the macro trends we know that interest rates are going to be cut in 2026 which will make it easier for companies to like restructure their loans or to actually make capital.
We know that the mortgage rates are going to come down because the interest rates are going down so like that was like so lenders and people that deal with mortgages should in theory have an easier time making money in 2026. We know that there's going to be a labor market that's kind of fragmented like you what I just looked at the latest December labor report for the private companies is something that we've seen now for this will be the sixth month where like there's hiring going on. It was at 41,000 private jobs were added in December but if you dig under the hood you'll see that like all of them came in the education and the healthcare field and like the actual jobs that most average people can get in say the industrial or the manufacturing or like the professional services and stuff like that they all actually lost jobs in December so like the labor market is going to be fragmented into specialized jobs that people can act like only a select few people can get jobs in these sectors and then the sectors that most people have the skills for is they're actually contracting so like there's going to be a higher unemployment and so that's a macro trend to keep an eye on.
Another macro trend is that prices are going to cost more because we still have tariffs in place and that's just how it's going to be so the prices cost more like the consumer staples and the consumer discretionary in theory should have higher earnings because people are paying more for the same products that they've been buying for like 20 or 30 years. So these are all like boring things to research but they're super essential and actually constructing a plan and like I mean we discussed this I don't remember what podcast it was it was like one of the first few ones like you need to have a plan of action when it comes to investing like okay I want so do you want your portfolio to be like equally balanced among like eight or nine different sectors if so then you have to create a plan like what are those stocks I want in those sectors or do you want a macro trend plan where like I know these certain sectors are going to over perform so I'm going to like I'm going to skew my allocation higher to these sectors you know what I'm saying so always have a plan even inside your plan you should have a plan like okay so I think the healthcare sector is going to over perform I think the pharmaceutical sector is going to over perform as well so I'm going to invest in BMY or I'm going to invest in MPW well what you have to have a plan inside the plan like what happens if like the pharmaceuticals outperform the medical REITs like what are you going to do with MPW at that point. Okay so if you would have taken the 46 stocks that we mentioned that Tim pulled out of here and assumed we invested equal amounts in every one of them to make it easy to do the average and you totaled up all of those actual returns obviously this isn't the most accurate way to do it but this is a way to compare it because it's hard to do the apples to apples anyway so we let's reiterate Russell 6000 was 8.69 percent up for the year S&P was 15.6 percent up for the year NASDAQ was 18.36 percent up for the year and the Dow was 11.87 percent up for the year totaling all that stuff doing that average yada yada it puts our quote-unquote portfolio at 19.14 percent up for the year so it beat every one of those individually just because we know the macro trends so you could also just invest in a freaking S&P like that plan I was just talking about you could actually break it up even further like because our portfolio is heavily skewed towards the small caps so the fact that it was 19 percent for all these and the Russell was at 8.7 percent actually kind of puts that in a better a better illustration the S&P is like the larger companies obviously we have some S&P stocks and the NASDAQ is like pretty much the larger tech companies so obviously we have some exposure to that but I think whenever I go into Schwab and I look at like the portfolio breakdown it's like 60 percent small cap so 60 percent of our portfolio is small cap and small caps because large caps have had such a nice run small caps should in theory return to the median so they should have a pretty good 2026 and 2027 to come back up to the median Tim also said that if you take the ones that we did not put in there and just assume that they basically became were like break even that makes them a zero percent added on so it doesn't really matter so you'd end up at the same number anyway well now obviously that they weren't all zero but like but I'm saying from simplicity standpoint to assume the most part like the two portfolios if you do total return versus total return the both portfolios beat the market beat the market but there are some like discrepancies in that because we have like a lot of exposure we have like fifty thousand dollars exposed to the round hill things so like like that's that's very like those are very difficult to compare to the market because they're just high yield yeah would not encompass that equation but the retirement account did really well and it only has a limit it only has like maybe five percent exposure to the high yielders and we've actually since we put the money in on the live stream we've actually separated the accounts into like basically a van life retirement account which has like the better ones and then a van life income account which has like all the high yielding ones so moving forward I'm going to keep track of both the retirement and the high yield they're going to be kept track of but they're going to be separated so it'll be a better indication and like I can't stress enough that if you have say more than seven stocks you should have a spreadsheet that you monitor all this stuff I know it sucks and it's tedious and like it's probably easier to have someone else do it but if someone else does it you're not learning the lessons and you're not you're not digesting the data as well as if you're also not seeing the potential like red flags that pop up that throughout the year so like that's one of the biggest things is like helping you so you don't really necessarily have to like tune into all the crazy media and crap like you can see it in your portfolio before it's probably hitting news and make your moves before everybody else knows about it so that you don't like lose your wins and you know take your before bigger losses off the table the other component of that is again Tim said it earlier that when you're in Schwab whatever the heck they're using to calculate your ups and downs are like I don't even know what the hell equations they're using but they're using something that just doesn't actually make sense because of wherever the hell they're putting their data points and bounds it's not just well I know but this is how like vanguard's the same way yeah the frankie and alex have fidelity it's the same way like they're all just like I don't know how they'd calculate shit I don't know if they do it on like a monthly thing I don't know if they do it on like the year to date but but it's it's misleading is essentially what I'm trying to say and when you have your own portfolio or your own spreadsheet set up you can actually see your real time percents losses ups or not even really pay attention to that part of it but see your constant growth of your dividends and see your constant growth of your share quantities which for dividend investing that's pretty much the main parts of what matter and the reason that I suggest doing your own spreadsheet is for the all the data the car I'm just mentioned but at the same time like Schwab doesn't care about your retirement as much as you do yeah so would you rather have a like a a more I guess specific specifically tailored data to you to like what you want because Schwab literally doesn't care they say this is how much you bought this is how much you have this is your return but it's not actually including the dividends because when it does the dividends like for example with triple m it's all profit so like they don't really they don't register that the three thousand five hundred dollars is all profit so like they still do the compounding like okay you got a dividend for this much here's your new here's your new shares with the drip and here's now here's your new cost basis well if it's all profit you had to put no money into it and you buy like with all profit dividends you literally like that doesn't actually affect your money off the table and that thing is just sitting with like house money basically it's a huge different like one of the things I'm seeing though with the different brokerages is like well they they use dividends as you put more income in no matter if like you didn't so for example agnc pays out every month even if you didn't every month you get every month you get a dividend from agnc that actually affects the overall numbers when it and in reality it doesn't because you didn't put any new money in so what it's doing your cost basis is still three thousand dollars no matter if you get if you got two years worth of agnc dividends reinvested back into it it doesn't matter your basis is still three they assume that you have drip on even if you don't have drip on and reallocate the other ones no they use drip but they just reallocate no no but i'm saying even if you don't have drip on they assume every like their calculation assumes drip is on yes and re-compounding no matter what you're doing with that money from what i'm so that's okay so that's part so they just did a simplified equation but if it's not accurate that number doesn't apply to you is essentially the point here the point of it all is the data you want the most up-to-date accurate data that pertains to what you care about like and as a human we need micro wins to continue to do what we're doing and if we're looking at our portfolio and that number is going down down down down down we're going to start actually triggering parts of the psyche that make you want to sell even if you're actually up because you're not tracking it with your own spreadsheet so do yourself a favor and use your own spreadsheet i literally just commented on this to frankie and alex because she got like all right so i need i need your end of year data she sent me the end of your data i said there's two stocks that i know that you're up like 20 some percent in that they say you're down like 12 it was uh hercules capital which i know for a fact she's up in and it was um xyld which again i know for a fact she's up in because i keep track of everything even if you do like some skewed equations there's no way that there's a 40 difference so i don't know what fidelity is doing with their with their with their computations but it's like it's wrong so it's just easier to have a spreadsheet so that you can monitor your own investments and it's like anything else if you do it every time you get a different and if you're broken like us what she just said it's not accurate like if you see your portfolio balance go down down down down down you're like oh i have to sell fuck no that to me that means i better buy more of this and you can actually have that you have the freedom and the peace of mind to do that if you're if you have say 10 stocks and you research them and you do the earnings reports and you monitor everything so when they'll say like pepsi's down 15 but you've done all the research and you know like the price of pepsi should be this so anytime you see it like 15 where we're 15 below where it should be it obviously is just an instantaneous i want to buy that because it's like if you see a coat you love that is brand new on the shelf and you're like hell no i'm not paying 230 for that thing and then you watch it you watch it you watch you wait into spring you see it into summer and it drops over like 75 in value would you not buy that coat that you're actually dreaming and like lusting over for that amount of time for the following winter you know the cycle of the season is going to come back into play and you want that freaking coat so why wouldn't you buy it it's 70 off there's nothing wrong with the coat in fact it's the same coat blinded man's awesome yeah and again that seasonal weather perspective thing changes and like really the the seasons are a really good analogy of what happens in socks because different sectors come in in and out of seasonal favor because of demand cycles and economic cycles and it's literally the same concept a prime example that would be ARLP because it's a coal stock yeah that's a really good one or ugi because it's a yeah a gas heat stock so winter and summer like so those are two ones off the top of my head where you can be like okay so if you buy it in summer you're getting the deal generally well that's an easy correlation but all of the sectors i'm just saying like if people were interested that's too like huge and that's again macro trends like that's what i'm saying like when i said when i say macro trends if you know that ugi goes up every winter because there's more consumption of gas every winter and you know that in this in the summer it goes down because people aren't consuming gas and you see that repeated over and over and over well fuck it that's easy that's easy money right there you just buy in the summer sell it like sell it dead december january and then do it again in the following year well and if you're like us and like to travel if you ever sit on like google flights or something and you're sitting like when we went to hawaii i was watching the price of flights to maui for probably a couple of months and like the minute it dropped below the 500 round trip mark i knew it was a freaking steal and actually i hesitated because it happened right when i started watching there was like a 389 flight round trip i hesitated and it was gone and i never saw it again past that point and i think all the flights past that were like 700 800 900 i don't know they were up we got it for less than 500 but i could have had it for 368 because i freaking hesitated but at the same time i didn't have that exposure of what like good prices were because i hadn't been looking and i it just happened in the beginning so it's like there's another example segue yeah perfect segue because next week's podcast oh shit i'm basically taking a a stock a bond um a bond fund or a close-ended fund a um etf preferred share and i'm like just like i'm doing um valuations based on the the different investment type things so you can see if you're getting a steal and in that particular one so i go i do i do like a close-ended fund it's um i believe it's usa it might be pdi maybe we can look at some freaking price i forget i forget which one i actually do but like basically i go through how you evaluate a close-ended fund so that you know that you're getting it for a for a deal how you look at a stock and so that you know that you're getting it for a deal so next week's is an evaluation reminder or if you haven't listened previously a valuation introduction but like to our recap of 2026 or 2025 is now done this was the last tidbit so everything else is going to be new moving forward so like next week's is going to be evaluation reminder or introduction so that because that's going to be super important in 2026 because the market's so volatile volatile and like a lot of things are so overpriced like having the perfect um price target not price target but having the perfect like a process in play where you can pretty much identify like identify what's on sale you can then you should help your research and you make more money you're getting a steal it sounds like 2026 should actually be the year that we do focus on valuations because of the volatility component because it'll be a lot of turning drip off well it's buying low turning drip off and it's the third year of a bull market so like it's when in 2024 it went up 2025 it went up 2026 they're projecting it to go up uh i don't think it's gonna go as much as they say but they're still like it's the third year but well it might go up but it's gonna have that massive pullback it's gone up for like 30 months in a row at some point you have to be concerned about elevated prices and so like it's just a reminder and i do think that being able to do like value investing contrarian investing in 2026 would be extremely beneficial on an individual stock basis not the market so i'm going to show you how to do the different ones and it'll be fun yep that's next week so tune in next week and if you haven't watched the live stream that we do a live stream every week where we actually do the same fucking thing about like evaluation so important it is so what i found in my years of doing this entry price is everything it's like pretty much determines so much about like your your potential returns and it's so much for your psyche if you're like a normal person like you get in something and it goes down 12 percent like within a couple months that's that yield protection we're talking about or that price most people most people that investment goes down 12 like in a month or two like oh i made it i made a mistake and they'll sell and that's just poppycock yeah you double down but i mean as long as everything else is good unless it's not like a bad camping water and icon news situation but if it just goes down for no reason that is a clear sign to just buy more to lower your cost in because that just means oops wasn't valued didn't quite make the right buy-in price and when things turn around we do have um i don't know when exactly probably in the next couple weeks this is actually gonna kind of transform into something different but we've said that and again we're we're about the package that was supposed to come tomorrow that came and then what's the last oh we're waiting on tim's bike and my bike to get overhauled at the bike shop and they said saturday so we're probably going that is the last thing i think holding us here and then we're gonna start hitting the road i don't know if we're gonna start the new podcast while we're in transit probably not because it's going to be stressful with cats across 2200 miles and two cars that cars well that's the thing i'm like fixing cars right now so that might be the the lingering thing is oh my god like this freaking part it's a crank pulley harmonizer balancer thing or whatever and you need like 180 foot pounds of torque you're in here with like i'm pretty sure this extension thing is gonna break i have to order the part oh man this is gonna be yeah like why is it the worst part possible on a vehicle that has to the break that's what we do for fun though i don't know but it is what it is i do it for fun and that's why we do this but this is going to transform into like a like part how it's been and part like psychology and alignment shit because we're going to talk about all the basic stuff i've seen so many times in the last like probably 18 months where people sell when they shouldn't sell and it's like why do they do that yes so the psychology is super important and those of you who are still sitting on the sidelines even after two years of us doing this or however long it's been it might be why are you on the sideline why are you still psychological thing that needs to be addressed where's the hang-ups and the psychological psychological components i'm hoping will help you guys take the action you really want to take and get rid of the fear component like that's the goal going forward is going to be pivoting to focusing on all of like the the root stuff that's holding people back so we're gonna get rid of all the sticking points going forward hopefully hopefully hopefully but that's it for this week see you guys next week with valuation yay yay