Looking for a proven way to compound your investment over the long term? Take a stab at the Coffee Can Investing strategy! Before I get into the list of stocks, it’s important to understand the basics of this investment strategy. If you’re totally new to this, you can check this article to read in detail about the strategy, benefits, reasons behind the success and the list of stocks from the Indian stock market (for each year 2020-2024).
I have been investing in this strategy for the last 5 years (in the India stock market). Each year I create a new list of stocks (in July, after all the annual reports are out) and the results are as follows (as on 6 Sep 2024) –
2020 portfolio – 16% XIRR*
2021 portfolio – 13% XIRR
2022 portfolio – 27% XIRR
2023 portfolio – 67% XIRR
2024 portfolio – 17% Net returns (1 year not complete yet – XIRR is available post 1 year of first cash flow)
*XIRR (Extended Internal Rate of Return) is used above – Unlike simple annualised returns, XIRR accounts for the timing and amount of each cash flow. This is applicable in this case since I had put monthly SIPs into the portfolio. e.g. From July 24 to June 25, I will add money monthly into the 2024 coffee can portfolio.
Using the same method as I used for India, I came up with the list of stocks for the US stock market (portfolio for 2024) using the last annual financial data (2023).
Why US? A few reasons!
- To have a share of the pie of the largest stock market in the world (see image below)
- US market is more mature and hence less volatile
- Innovations (themes like AI), mostly start from the US so you will get to to have a share of the pie due to early movers advantage.
- Hedging for INR depreciation to the USD. There has been a steady depreciation of INR to the USD and it’s a good strategy to invest some part of your portfolio in USD
Here are the list of Coffee Can Portfolio US Stocks for 2024
- Adobe Systems
- Zynex Inc
- Kaspi.Kz AO
- Tenable Holdings Inc.
- Paylocity Holding Corporation
- Paycom Software, Inc
- Sendas Distribuidora SA
- XPEL Inc
- KLA – Tencor Corporation
For most of you, you might be hearing these names for the first time. These companies were picked since they have consistent double digit revenue increase (growth) along with a double digit return on equity (profitability) over each the last 6 years.
I plan to update the blog or add to the comments how the portfolio is doing every 3 months, with respect to the index.
How To Invest In These US Stocks?
The best way is to invest equal amounts every month into these 9 stocks. e.g. $30 per stock per month makes it $270 SIP every month. Depending on the country where you reside, you can check which platform lets you invest in the US stock market.
If you are in India, you can use the platform called Vested and use their DIY Vest function to create the portfolio. There is an initial KYC/ setup process to be able to transfer funds to your US “wallet” from your Indian bank account and then you’re good to go. You can set up SIPs once the set up is done.
What’s Next?
I will create the 2025 portfolio once the annual reports of all companies are out in Q1′ 2025. Till then I will be adding to the 2024 portfolio. Once the 2025 portfolio is ready, I’ll start adding to that one.
2024 will be left untouched for “long term” (for me, that’s 10Y).