MyFirstDoubleEvery word, explained

Glossary

Plain-English definitions of every term used in MyFirstDouble. Start here if something doesn't make sense.

Lessons from real history

A concept sticks better when you see it happen. Every number below is what these assets actually did in the years shown.

Diversification
The year almost everything fell — except what didn’t

In 2008 a financial crisis dragged stocks down hard, and the banks at the centre of it fell the furthest. But not everything moved together: gold and long-term government bonds actually rose while stocks collapsed. Someone spread across all of them did not go to zero. That, in one year, is the whole point of not putting every egg in one basket.

BanksXLF−56.7%
US stocksSPY−38.3%
GoldGLD+4.9%
Long bondsTLT+28.3%
Diversification doesn’t stop losses — it stops a single bad bet from wiping you out.
Volatility
High reward comes with a bumpy ride

Energy is one of the most dramatic sectors because it rides oil prices, which are wildly unpredictable. Look at the same sector in back-to-back years, or a few years apart: it can crash and then soar, almost mirror images. Big returns usually come bundled with big swings — that’s the price of chasing them.

Energy ·08XLE−39.8%
Energy ·09XLE+19.3%
Energy ’15XLE−23.3%
Energy ’22XLE+64.2%
A high average return means little if you can’t stomach the years it drops.
Thesis
The obvious call isn’t always the winning one

In 2022, rising interest rates hammered almost everything at once — technology had its worst year of the 2015–2024 decade, and even bonds, normally the calm anchor, fell. The one big winner was energy, the sector many investors had written off. Years like this are exactly why you write down your reasoning before you know the result: it’s far too easy to feel you saw it coming afterwards.

TechXLK−28.2%
EnergyXLE+64.2%
Long bondsTLT−31.2%
A thesis written in advance is honest. Hindsight is not.
Benchmark
The plain index is harder to beat than it looks

SPY does nothing clever — it just holds the 500 biggest US companies and sits there. Yet in strong years it quietly returns a lot. To beat it you have to be right about something the whole market missed. That’s hard, and it’s exactly why we measure your decade against a simple buy-and-hold of SPY.

SPY ’19SPY+28.9%
SPY ’13SPY+29.7%
SPY ’23SPY+24.2%
Beating the market isn’t about doing more — it’s about being right where others were wrong.
Interest Rates
Even “safe” bonds can have a terrible year

Long-term government bonds are usually the steady, boring part of a portfolio. But their price falls when interest rates rise — and when rates jump quickly, they can fall as hard as stocks. What counts as “safe” always depends on what’s happening in the wider world.

Long bonds ’22TLT−31.2%
Long bonds ’08TLT+28.3%
No asset is safe in every weather. Safety is a relationship, not a label.

The Basics

ETF
Exchange-Traded Fund. A basket of stocks or bonds that trades on a stock exchange like a single stock. Instead of buying each company individually, you buy one ETF and get exposure to all of them at once. ETFs are cheap, diversified, and easy to buy.
Example: SPY is an ETF that holds all 500 companies in the S&P 500 index. Buying one share of SPY means you own a tiny piece of Apple, Microsoft, Amazon, and 497 others.
Portfolio
Your collection of investments. In MyFirstDouble, your portfolio starts with $10,000 and is made up of shares in the ETFs you choose. Its value goes up or down as the market moves.
Allocation
How you divide your money between different investments, expressed as a percentage. If you put 50% in SPY and 50% in QQQ, that's your allocation. The percentages should add up to 100% (or less if you're keeping some cash).
Example: 40% SPY + 30% QQQ + 30% GLD means $4,000 in US stocks, $3,000 in tech stocks, and $3,000 in gold.
Rebalancing
Adjusting your portfolio to a new allocation. You sell what you have and buy a new mix. In MyFirstDouble, you do this once per simulated year — on the one weekday you chose — just like a long-term investor who reviews their portfolio annually.
Return
How much your investment grew or shrank, usually expressed as a percentage. A 10% return means every $100 you invested is now worth $110. A -10% return means it's worth $90.
Example: If SPY returns +25% in a year and you had $4,000 in it, you end the year with $5,000 — a $1,000 gain.
YTD (Year to Date)
How much an asset has returned so far in the current simulated year. If a year started on 1 Jan and you're in July, YTD shows the return from 1 Jan to July.

The 14 Assets

SPY
SPY
Tracks the S&P 500 — the 500 largest US companies. The most widely used benchmark for stock market performance. When people say "the market", they usually mean SPY.
QQQ
QQQ
Tracks the Nasdaq 100 — the 100 largest non-financial companies listed on Nasdaq, with a heavy technology weighting. Includes Apple, Microsoft, Nvidia, Amazon, Meta. More volatile than SPY but historically higher returns.
IWM
IWM
Tracks the Russell 2000 — 2,000 small US companies. Small-cap stocks can grow faster than large-cap but are riskier and more sensitive to the economy.
VTI
VTI
Tracks the entire US stock market — large, medium, and small companies combined. More diversified than SPY and moves very similarly to it.
EFA
EFA
Developed international markets: Europe, Japan, Australia, and other wealthy countries. Useful for diversifying beyond the US. Affected by currency exchange rates.
EEM
EEM
Emerging markets: China, India, Brazil, South Korea, and others. Higher potential growth but also higher political and currency risk. Very sensitive to global trade conditions.
XLE
XLE
Energy sector: oil, gas, and energy companies like ExxonMobil and Chevron. Returns are strongly tied to oil prices, which are highly unpredictable.
XLF
XLF
Financial sector: banks, insurance companies, and investment firms. Performs well when interest rates rise and the economy is growing.
XLK
XLK
Technology sector: software, hardware, and semiconductors. Has been the strongest-performing sector over the last decade, but also prone to sharp drops.
XLV
XLV
Healthcare sector: pharmaceutical companies, hospitals, biotech, and medical devices. Considered defensive — people need healthcare in good times and bad.
XLU
XLU
Utilities sector: electricity, gas, and water companies. Very stable, pays high dividends, but sensitive to interest rate changes. A defensive choice in uncertain markets.
AGG
AGG
US bond market: a mix of government and corporate bonds. Bonds are loans you give to governments or companies — they pay regular interest and are much less volatile than stocks. Good for reducing overall portfolio risk.
TLT
TLT
Long-term US government bonds (20+ years). Very sensitive to interest rate changes — when rates go up, TLT falls. When rates go down or the economy looks bad, TLT often rises as investors seek safety.
GLD
GLD
Physical gold. A traditional safe haven — investors buy it during uncertainty, inflation, or market crashes. It doesn't generate income but tends to hold value when everything else falls.

Investment Concepts

Diversification
Spreading your money across different assets so that a single bad investment doesn't ruin your portfolio. The classic saying is "don't put all your eggs in one basket."
Example: If you put 100% in XLE and oil prices crash, you lose everything. If you spread across SPY, GLD, and AGG, a crash in one area is cushioned by the others.
Benchmark
A standard you compare your results to. In MyFirstDouble, the benchmark is SPY "buy and hold" — meaning someone who put all their money in SPY at the start and never touched it. If you beat SPY, you out-performed the market.
Volatility
How much an asset's price goes up and down. High volatility means big swings (QQQ, IWM). Low volatility means slow, steady movement (AGG, XLU). More volatility = more risk, but also more potential reward.
Bull Market
A period when the market is rising and investor confidence is high. Generally defined as a 20%+ rise from a recent low. 2017, 2019, and 2023 were bull market years.
Bear Market
A period when the market is falling sharply. Defined as a 20%+ drop from a recent high. 2022 was a bear market year due to high inflation and rising interest rates.
Conviction
How confident you are in an investment decision. In MyFirstDouble, you rate your conviction as LOW, MEDIUM, or HIGH for each position. Over time you'll see if your high-conviction bets actually paid off.
Thesis
Your written reasoning for an investment decision. Why are you putting money in this asset? What do you expect to happen? What could go wrong? Writing a thesis forces you to think carefully and creates a record you can learn from later.
Cash
Uninvested money. In MyFirstDouble, you can choose to allocate less than 100% of your portfolio — the rest stays as cash. Cash doesn't earn returns but protects you from losses. Holding cash is a valid strategy when you expect markets to fall.
Interest Rates
The cost of borrowing money, set by central banks like the US Federal Reserve. When rates rise: bonds fall, utilities fall, banks may benefit. When rates fall: bonds rise, growth stocks benefit. Interest rates were a major market driver in 2022-2023.
Compounding
Earning returns on your returns. If you earn 10% in year 1 and reinvest everything, in year 2 you earn 10% on a larger amount. Over 10 years, this effect becomes powerful — even modest annual returns lead to significant growth.
Example: $10,000 with 10% annual returns becomes ~$25,937 after 10 years due to compounding.