Wrapping up the Review of 2021

In my predictions for 2021, I said this

My last prediction is that in 2021, the stock prices will go up and go down. But If you dollar-cost average into a S&P 500 index fund during 2021 on a monthly or semi-monthly basis, my prediction is that you will be up about 10% at the end of the year.

Well, in 2021, the S&P 500 was up about 27%. That is exceptional. To understand how exceptional it is, I looked at the S&P 500 returns for the last 94 years and counted that this index has returned 25% or above only 14 times in the last 94 years. 

However, if you were invested in the growth stocks for 2021, it did not feel like that. The stock market has been especially volatile since the beginning of November, 2021 and with inflation rising to almost 7%, stock prices are falling even more as many people are selling their stocks to invest in bonds which are rising higher in yields. My personal portfolio is in a bear market and I am down anywhere between 30-40% from my all-time highs.

What am I doing?

I started investing seriously in 2012 and when I experienced my first 20% crash in my portfolio, I remember being scared and seriously thought about selling it all and never investing in the stock market again. What helped me get through was reading quotes such as the one in this article. Thankfully I did not sell and when the market recovered after the crash I regretted why I did not buy more during the crash when I was so scared.

After the second 20% crash in 2015, whenever the market falls like this (2015, 2018, 2020 and now), I feel like a kid in a candy store. There are so many good deals and I have trouble deciding what to buy because literally everything is on sale.

January is an especially busy month for me, as I front-load my retirement accounts for a backdoor Roth IRA and invest for my kids. So, I have been actively adding to my portfolio. I added to Upstart (UPST), Digital Ocean (DOCN), Mercadolibre (MELI) and a new company Affirm (AFRM).

I have previously written about UPST, DOCN and MELI multiple times here and here. Affirm is a new publicly listed company that was started by one of the founders of Paypal, Max Levchin and it is a leader in the Buy Now Pay Later (BNPL) space. You may have seen Affirm as an option for checkout at Target, Amazon, VRBO, Delta Airlines and American Airlines and other retailers. Basically, merchants are allowing customers to split their payments via Affirm and that helps merchants drive their sales and helps customers to pay in installments rather than putting a big chunk of expenses on their credit card. Affirm has partnerships with 60% of e-commerce in the U.S. (Amazon, Shopify, Target and Walmart). Their app has more than 1 million reviews on Apple and Andriod app stores and their rating is 4.9 out of 5 so clearly the customers are liking their app.

As I always do with all companies in my portfolio, I also want to track revenue growth for Affirm over the past two years

Affirm Revenues


Year Q1 Q2 Q3 Q4 Total
2021 174m 204m (57%) 231m (67%) 262m (71%) 871m (71%)
2022 269 (55%)        


They have reported only 4 quarters as a public company, although they have been a private company for about 10 years. Recently they signed deals with Amazon and Walmart and their guidance for the next few quarters does not include any contribution from these businesses. I am excited to see what will happen to their revenues as they scale into these new partnerships. As of now, this is a starter position and I will be looking to add as new funds become available.

I still believe in the companies that I picked at the beginning of 2021 and I still own all of those. Stock market cycles like the one we are at present are part and parcel of investing in the stock market. Volatility is your friend. I look forward to sharing my updates on the earnings results of these companies as the earnings season begins this week.