Effortless Investing

The market moves a lot, over the years the market has moved dramatically. During recessions, wars, epidemics, the market reflects real world conditions. While the market is not as connected to real world events as it once was, there are still ties. The most recent example of this is the COVID-19 pandemic. While the pandemic is still in the back of our minds. People don’t like to dwell on it too long. It was a difficult time for everyone. Here in the UK we spent months locked away inside to prevent spreading the virus.

While people around the globe suffered, so did the markets. Now referred to as the 2020 stock market crash. The largest daily drop in the stock market has since been coined “Black Monday”. On March 16th (Black Monday) the drop was 12-13% in most global markets. By the end of 2020 however, the market had recovered. Reaching new highs.

So why am I taking everyone back to such a difficult time? Well the 2020 crash demonstrates quite how short lived severe stock market drops can be. Some of the most severe stock market drops in history have more than recovered within a year. Sometimes stock market losses that seem catastrophic can seem insignificant over the course of a year or two. This week in fact has been a recent example of this.

1. The Biggest One Day Loss in History:
2. Honorable Mentions:
   1. National Grid (NG)
   2. Advanced Micro Devices (AMD)
   3. Costco Wholesale (COST)
3. February 2025 Stock Pick:
4. iShares Physical Gold (SGLN)

The Biggest One Day Loss in History:

On Monday 28th of January 2025. US tech stocks were in disarray. Why? A Chinese AI start-up named DeepSeek was revealed. A previous honorable mention of The Effortless Portfolio, Nvidia, saw its share price fall by over 16%. Marking a $589 Billion loss for the market value of the company. The biggest ever one-day loss Wall Street has ever seen.

By the next day, Nvidia had already rebounded 5%. Personally, I bought more shares of Nvidia yesterday. While it is not a pick for The Effortless Portfolio, it is a personal favorite. I believe this 16% loss, will seem insignificant when we look back on Nvidia’s growth over 2025. But only time will tell.

If Nvidia had been the pick of the month at the beginning of January. We would currently be sitting on a loss of over 12% at the time of writing. Luckily for us, Alphabet stock was January’s curated pick, landing us with a tidy 2.6% profit. While this may seem small, this is an incredible return for a month long investment. Especially given the current market conditions. While I still believe Nvidia is a fantastic investment. Alphabet made it on to The Effortless Portfolio for a reason.

Anyway, that’s enough discussing last months pick. What about this month?

Honorable Mentions:

While I would like to include Nvidia on the honorable mentions list again. I won’t due to the risk of me repeating myself. Due to us still being relatively early in the year. I want to choose a stock renowned for growth, even in poor conditions of the market. Giving us a strong base to make other investments from. Preventing us from The Effortless Portfolio being in the red by the year end.

Here are some stocks that nearly made the cut:

National Grid (NG)

This is a stock I absolutely love. I may have mentioned before my love of dividend paying stocks. For those of you that don’t know. Dividends are a distribution of profits paid by a corporation to its shareholders. National Grid currently pays an annual dividend of 5.66%. Meaning if we were to invest £100 into it now. By the end of the year we would have been paid over £5.66 in dividends alone.

While there is also the growth of the stock to account for in this profit. The stock appears to undergo cycles. While these cycles aren’t as obvious on the 1-year chart (above). They are definitely easier to spot on the 5-year chart (below).

The chart shows that National Grid seemingly hits highs and lows relatively frequently. With relatively smooth transitions in between. This could be to real world conditions and demand on the grid. But either way, I personally think there is a risk of the stock dropping in the current months. While I would not be concerned by this as it would almost definitely rebound. I do not want to choose it for The Effortless Portfolio. As it runs the risk of pulling our profit into the negative before year end.

At the time of writing National Grid stock is at a price of about £9.654.

Advanced Micro Devices (AMD)

AMD is a tech stock that has seen a bit of a downturn in the market recently. The stock is down over 35% in the previous year. So why did I consider it as a contender to be on The Effortless Portfolio?

Over the past 5 years AMD is up over 144%. An impressive return for any stock. It has done this regardless of the 35% downturn over the past year. Looking at the stock chart, AMD has previously recovered from a position similar to this. It has had a large drop to about $55 in the past. Then recovering to an all time high of over $227 and I believe it can do it again.

The reason I will not be adding AMD to The Effortless Portfolio, is mainly the fact it is a tech stock. I have previously mentioned the importance of diversification in investing. As we already have Alphabet, a major tech stock in our portfolio, adding another tech stock would reduce our diversity. As well as this, I don’t like to purchase stocks for long term investments banking on reversals. While there is every chance AMD will reverse its trend. There is also every chance it will not. I have faith AMD will, but it is not quite the low risk stock I am looking for.

At the time of writing this AMD share price is at $114.98. We will have to wait and see if the year holds a renewal for AMD.

Costco Wholesale (COST)

Costco Wholesale is a chain of huge stores packed with everything from groceries to electronics. Complete with its own private label brand. Costco keeps a fresh shopping experience by constantly changing inventory. Giving a “treasure hunt” like experience to the wholesaler. Costco operates on a membership model. Shoppers pay an annual fee to access the stores. Creating a sense of membership and exclusivity.

This model has brought Costco great success, and this is more than reflected in their share price. Over the past year Costco shares have increased by over 39% in value. With a total gain of over 200% over the past 5 years. These returns are both impressive and repeatable. Showing that Costco isn’t just having a good year, but a good decade.

So why isn’t Costco stock pick of the month? Well, it definitely could be. I would happily invest in Costco now and it may even make a surprise reappearance next month. The reason Costco is not joining The Effortless Portfolio quite yet, is because of my main pick. The main pick has proven to be more reliable in times of long term market down turns. Often performing well even when traditional investments are not. It has unmatched growth and is often considered a “safe haven” investment.

So to prevent any further suspense, here we have the stock of the month!

February 2025 Stock Pick:

iShares Physical Gold (SGLN)

SGLN is an exchange traded commodity. Also known as an ETC. An ETC is designed to track the price of a specific commodity, in this case, gold. SGLN is “physically backed”, meaning it holds the physical gold bullion to support its value. This gold is normally stored in secure vaults in a large bank. SLGN is traded on the stock exchange, like any normal stock.

While my ETC of choice is SGLN. I think any investment into gold at this time would be a good choice. Over the past year SGLN has seen a staggering growth of over 38%. Over the past 5 years it has seen over 80% in growth.

As gold is regarded as a “safe haven” investment. Meaning that during times when the economy is performing poorly or fear of a recession or financial crisis is looming. Investors tend to remove their capital from riskier assets like stocks, pouring their capital into these “safe haven” investments. As there seems to be a capability for a recession or financial crisis. I believe gold is a good pick early in the year. Before we get a grasp on how the year ahead looks for the markets.

As SGLN is physically backed, gold is a commodity with a limited supply. Making it a more reliable investment than paper money as its price rises with inflation.

While the prices of gold can be volatile and it does not generate an income like stocks or bonds. It is generally seen as a safe investment and has strong, constant growth.

For all these reasons, I am choosing to add SGLN to The Effortless Portfolio. At the time of writing, an investment of £100 gives us about 2.32 shares. SGLN is currently trading at a price of p4,307 or £43.07 per share.

Let me know in the comments what you think of this months stock pick. Would you have chosen the same?