A concentrated AI and semiconductor portfolio returned 47% annually since 2019 but suffered a 36% drawdown. Most investors can't stomach that volatility, especially during downturns like 2022 when rising rates crushed tech stocks.
I'm going to leave these for now. Uh, there's a few more questions. So we created just a concentrated portfolio, and this is why you wouldn't necessarily have a concentrated portfolio, because what would a concentrated portfolio look like if you just had AI, semiconductor, and quantum stock? What does it look like? Well, whilst historically over the last— and that's pretty long period— since 2019 generated 47% per annum, that's not what I'm bothered about. This is what will panic you and give you sleepless nights: a 36% drawdown. Couldn't you avoid that? You could avoid it if you followed the Daddy Bear rule, but most people won't because they'll be on a desert island, they'll be asleep at the wheel, whatever. So that's why a concentrated portfolio, even for me, I wouldn't just have this. Now, my sister has this because I know guaranteed she's not going to— she lives in Nashville in the US, and I know for sure guaranteed she's not going to look at this for 5 years. So I know that would draw down, like, a bit like her having a home. She's not going to check the house prices for 5 years. So she's fine with it, but I know a lot of my clients would keep checking. Therefore, this is not suitable for them because of that 36% drawdown. They'd all love this gain. Who wouldn't? So I show them this to show them what can happen. I'll give you an example. Imagine that, except— wow, well, why don't we put all our money in that? Well, you wouldn't, would you? And the point I make to them is a year like 2022 happens because there's a daddy bear. In other words, average prices fell and interest rates were rising.
