There's no getting away from the fact that it has been a difficult year for investors.
Since the start of the year, the S&P/ASX 200 Index (ASX: XJO) has lost almost 15% of its value.
This means that if you had invested $1,000 at the start of the year and earned the market return, you'd have $850 now.
But what about if you had invested these funds into Whitehaven Coal Ltd (ASX: WHC) shares?
How has a $1,000 investment fared in Whitehaven Coal shares?
If you were lucky enough to have bought Whitehaven Coal shares at the turn of the year, congratulations, you've smashed the market!
Thanks to booming coal prices, this coal miner's shares have risen an astonishing 225% since the start of 2022.
This means that your $1,000 investment would now be worth $3,250 today.
But the returns don't stop there. Whitehaven Coal has rewarded its shareholders with dividends totalling 48 cents per share in 2022.
Based on the Whitehaven Coal share price at the start of the year of $2.61, this would mean a yield on cost of 18.4%.
This adds an extra $184 to your return, bringing the total investment to almost $3,450.
What can you learn from this?
A key takeaway from this is the importance of diversification. Having a balanced portfolio with exposure to different sides of the market can help you avoid the worst of a market selloff.
For example, let's say you had a $10,000 portfolio at the start of the year across 10 different shares.
Even if 9 of the 10 shares in your portfolio earned the market return and were now collectively worth $7,650 instead of $9,000, your Whitehaven Coal shares would bump the value of your portfolio to approximately $11,000.
That's a 10% return despite the majority of your portfolio sinking deep into the red for the year.
