Let’s do the time warp again. No, don’t worry, we’re not in a 1970s musical nightmare. We’re going back in time to January 1, 2013, with $10,000 burning a hole in our pockets.
How could we have invested that $10,000? Well, a simple S&P 500 index fund would have netted us an impressive $12,350 by now.
But we could have done better: One stellar investment would have made us $428,571. Another one, though, would have left us penniless.
So here are 5 investments of 2013 that would have made us rich in 2013, and 5 that would have left us sobbing in the gutter.
Winning Investments of 2013
1. Fannie Mae (FNMA)
The mortgage giant that fell to earth in 2008 has now picked itself up, and notched up a ten-bagger in 2013. This is good news for the US government, which bailed the company out in 2008 and now owns most of the shares, but not such good news for investors who lost almost everything. If we’d put our $10,000 in Fannie Mae on January 1, though, we’d now have a cool $110,000.
2. Altisource Asset Management (AAMC)
You may never have heard of this stock. It only started trading just over a year ago, and it’s an asset management company based in the US Virgin Islands with only 5 employees, according to this profile. And yet buying its stock on January 1 would have turned our $10,000 into a spectacular $131,369! No wonder some analysts think it’s stock has gone up too far.
3. Firsthand Alternative Energy Fund (ALTEX)
Mutual funds and ETFs don’t tend to score such spectacular results as individual stocks, because they’re more diversified. But by investing in the Firsthand Alternative Energy Fund we’d have almost doubled our money in 2013, not a bad result at all. Plus we’d have that warm and fuzzy feeling of knowing we’d helped fight climate change.
4. The Venezuelan stock market
It’s a country more known for anti-capitalist policies than stock-market performance in recent years, but Venezuelan shares have surged 452% this year, the top performance of any international stock market. If we’d found a way to invest, and were prepared to stomach a certain amount of risk, we could have turned our $10,000 into an impressive $55,200.
Here’s one that not many people would have predicted. If we’d poured that $10,000 into the virtual currency Bitcoin, we’d have ended up with a whopping $428,571. At one point in early December, our Bitcoins would even have been worth more than $850,000.
In fact, the price is so volatile that by the time you read this, that figure could be anywhere from zero to a million dollars or more. Investing in Bitcoins would have been a wild ride, but you can’t argue with the end result.
The Losing Investments of 2013
1. JC Penney (JCP)
Some people tell you to buy what you know. If we’d followed this advice and put our $10,000 in familiar old JC Penney, we’d have a paltry $3,839 to show for it.
2. Gold bars
Hey, what could be safer than investing in gold bars and stashing them in a bank vault? Well, quite a few things this year. Our gold bars would have lost a quarter of their value, leaving us with just $7,450.
3. Wells Fargo Advantage Precious Metals (EKWAX)
Pay no attention to the name. Investing in this fund would have put us at a disadvantage this year, wiping out about half of our $10,000. On top of that, it has a 5% load fee and 1.84% annual expenses, costing us another $684.
4. Emerging markets (except Venezuela!)
If you’re investing in the emerging markets, you have to know your geography as well as economics. While Venezuela’s stocks went on a tear, its neighbor Colombia saw a 22% decline, according to MSCI. In fact, there was red ink across many of the emerging markets this year. Brazilian stocks plunged 20%, while even economic powerhouses like China and India were down.
5. OCZ Technology (OCZ)
It’s an investor’s ultimate nightmare: the company you put your money into going bankrupt. It happened to investors in OCZ Technology this year. The company recently sold what was left of its assets to Toshiba for $35 million, and shareholders seem likely to end up with a big fat ZERO.
What’s been your best and worst investment of 2013? Tell us in the comments below.