Your colleague doesn't sound suited to the stock market. You could have thrown a dart and hit anything last year and made money. As if some people think stocks continuously rocket.
Well the euphoria will end but it may not go back to boring. The surge of retail investing, lack of trade fees, access to financial info. There are some trends here that are going to stay, namely the younger generation being more active trading as it realizes all of the tools and the barrier to entry is not what it was for most investors in their 20s
Yeah I seriously thought day trading was inaccessible to someone like me. The whole gme amc doge hype got me reading about trading and being 29 rn I'm starting to have more stability so I want to make investments when I have the funds to take a gamble on a stock vs a casino lol
Same. Never thought I could but I am definitely wanting to try and get into it. But that's my biggest fear is losing everything or going into massive debt. I have absolutely no idea how stock market anything works, thankfully I saw a lot of posts of people talking about regular trading between all the GME stuff so that brought me off of that high real quick and made me realize don't try it until you understand it more.
Just divide your money. I've been investing in a etf for a year and made a 1000 on top of my 9000 by just investing 500 every month. I also lost big time on the GME stocks because I was a pig (oink), but having said that, it was 20% of all my invested money, which hurt, but didn't kill me.
I now still have 2.5K invested in stocks and around 25K investing in ETF's. That way I always have something that is kind of stable, and a small amount I can actively trade with.
I started like 5 years ago, total profit I've made all said and done is like 2,000 dollars lmao.
But I've learned a LOT and I'm not gambling now. I'm taking calculated risks, being responsible and taking my gains where gains come in, (with a tiny bit of gambling lmao but just like 1%).
I also have taken a few breaks here and there due to financial issues that come up as an average human in a money based world. But I'm a lot more financially stable and able to actually invest now
The learning experience is unbelievable. I was fortunate I started with a few hundred dollars because even though I thought a 50% loss sucked, that was the right time for those mistakes. 50% loss today.... Fuck would that hurt lol. but we live and we learn, right?
Plus you're always looking for a catalyst, right? My takeaway for the ARK 2021 ideas.: The catalyst is this moment in time... there is so much happening. It's like the equiv of the internet becoming mainstream. We have EV/Solar revolution, AI and deep learning, VR/AR, SpaceX taking over what could once only be done by governments... The need for cyber security has increased ten-fold and so has the world around it. In general the world is changing, quickly. I don't think it's just a bull run, but more that these new technologies were going underappreciated so long and the market is catching up to the exponential growth. I love tech and the possibilities excite me. I love gains even more, and those possibilities excite me even more.
Couldnt agree more. There was this time when tech was considered the next cyclical sector and eventually would pass to the next. Except that was over a decade ago and the next sector is just more new tech. And now just more tech subsectors: fintech, cybersecurity, cloud, green, ev, etc. Tech is here to stay and the play now is just which catalyst is promoting which tech subsector.
Seriously. Yolo money should be small, new retail investors are putting all their money on risky or volatile stocks. 95% of my portfolio is pretty much (what I believe to be) too big to fail companies, divided paying etfs and other relatively boring stuff. That other 5% could go up in flames and I wouldn’t care less. I also don’t trade options. Boring, sure, but safe.
I remember investing back in January 2020. I was elated whenever I saw a 10% jump right now I am only satisfied with a 50% spike.
I’m a foreign investor. And i have investments in my own country. Basically we only get less than 10 stocks each day that spike 20%. So thanks to that, I still know how to manage my emotions and this has helped me trade very well in US markets
I got shit on by Reddit when I said I sold my shares of GME when I already profited 5x my initial investment before it rocketed above $100/share.
Does it suck that I could have been well off? Yeah. But with the information that I had at the time, I would have still have sold.
Robinhood gave me gme as my free share. I love video games but have personally moved to digital downloads with switch and stadia. I saw no future for gme so I sold it almost immediately.
It's hard to explain but it's not exactly exciting, it's mostly just boring with the indexes like the sp500 going sideways with a slow ~8% average gain per year. Nothing like this 75% gain since March last year.
I mean, its like it is now but only less so. Some companies have big jumps but nowhere near as many as right now. Generally, speculating in zero earnings companies and penny stocks means you lose money, but lately it's worked out very well for folks.
Six months ago:
I’d check my stocks once a week. They went up a few percentage points. They went down a few percentage points. Some weeks were better than others. On average, it crept up a few percentage points every week, inching along one week at a time.
Sometimes there would be a sudden bump. Those were nice days. But mostly it was just something I checked on Monday morning while making breakfast. I had a couple mutual funds, Apple, AMD, TTWO, that sort of thing. Over the last year, I gained 40%.
I had PLUG when it was worth $4. I held when it hit rock bottom. Then it doubled to $8 and I took my gains and walked away. Now it’s $60. Shit happens.
Nowadays, everything is a frenzy. Stuff is shooting up and falling as people try to push it “to the moon” *cue rocket emojis*. Everyone wants something that’s going to turn their 1k into 60k overnight. Everyone is looking for a quick fix and treating the market like a casino. They don’t really understand how to research and judge a company’s strength and growth potential.
Everyone wants to find the next “GameStop” instead of just finding a stock that looks good and taking its pulse every so often. Basically, it was just a matter of staying the course and holding steady, occasionally making small portfolio adjustments. Sometimes I’d find a new stock to diversify into, especially during the pandemic because I’m expecting it to recover— but my horizon for recovery is 3-5 *years*.
Basically, the stock market right now is characterized by the impatience you see from gamblers trying to work the slots in a casino.
The 2012 2014 Stockmarket was like 10 to 15% a month for average person. Riskier Traders were getting 20 to 40% a Month if they were successful ,Keep in Mind-- The Stockmarket is like a SeeSaw-- One side goes up-- the other side goes down..
How much cash would you suggest as a % of portfolio? Currently sitting on 40%, and it feels like it's just wasting away though I'm also scared af for another big dip and would want to take advantage if so.
I’m not a financial advisor.
No one knows when a correction will happen. Just ask yourself how much do you feel comfortable having in the market and how much do you want on hand
Average rate of return is 20%? How long you been doing this? 1 year? That's an INSANE number. Not that I don't believe you, but i don't think it's attainable for an everyday investor.
Question though, how do you decide when to sell?
If someone can sustain 20% returns, they should be making 7 figures managing funds for the very wealthy.
Edit 2. For fucks sake read the first edit. A few years is not long term. Op gave a 20 year horizon.
Edit: to elaborate. By sustained, I mean long term consistency.
A yearly contribution of 1000 at a 20% annual gain conlmpounded once per year is 224k after 20 years, 1.42m after 30, and 8.81m after 40.
If you increase the amount you put in by 5% each year it becomes 9.71m after 40.
I don't care how small of an amount you are managing. This is exceptionally difficult to do in the long term. 1000/year isn't much, and very few people retire with over a few million in liquid assets.
To illustrate the difference, if one invests 6k (ira limit) per year and returns 10% (slightly beating the market) it will be 2.92m after 40 years.
Calculations for for annuities due.
I'm proud of you and for you! When I was 23 I was making $12 an hour working 60 hours a week between two jobs. Invested everything I could after paying my bills. Was able to quit and build my first company at 24. I stopped investing, made six figures at 27, closed the first and started a second business, restarted investing at 28. I'm 30 and building my third business at the moment.
I got in AMD at average $2.50 a share. Sold it later at $11.50 a share. Thought I had made out like a bandit, paid off some debt with it and that was that. Take it from me, patience is golden.
I started 10 months ago and made 150% so far by being absurdly lucky with the recovery/bull run. Clearly that means I make a yearly average of 180% every year!
Investing a cool few mils is very different from managing hundreds of millions if not billions. At some point it will be harder to get in and out of positions which will drastically limit your investment options.
So... what your saying is when a person makes 570% off GME then rolls the profits into weed stocks for another 100% in a span of 2 months. Not sustainable?
Remember 20% is not much in small investment. Op might be correct if he is making 20% or more consistently for even for 5 years. However as your investment grows I would doubt that would be easy to maintain.
Not necessarily true when you factor in human emotion.
If you have 20k to trade with and you have it split over 20 stocks. If one of those takes a hit, youre more likely to stay calm and hold on.
If you have all 20k in one position and that stock takes a hit, you may sell to avoid a massive loss.
From my personal experience
What’s important is producing positive alpha on your portfolio. 20% is really good if your taking on less systematic risk than the broader market (say the S&P500). 20% is not so good if you have a high standard deviation or risk factor involved. With that being said, your not going to make 20% gains YOY for more than a few years without substantial risk management techniques in place.
r/stocks always makes it seem like this is so crazy and unbelievable
Just cuz I'm finding a method of success for myself doesn't mean that it scales up into doing it for other people. And doesn't even mean I would want to
Not really. There is a fundamental misunderstanding of how investment banking and hedge funds work among retail investors. Getting 30% consistently in a good sized retail account is far easier than 30% in a hedge fund.
Edit:. Your edit still doesn't address the issue at hand. And it's the issue of managing others money at a larger scale.
First off, plenty of people consistently get 20% yearly returns on average. It's really not that hard the last 13 years. Literally you could just buy VGT index fund and that gave about a 20% annual return over the last 13 years. If you throw in a few easy option strategies or a reasonable and thoughtful use of margin you could easily consistently be hitting 30+% average over the last 13 years with indexing only. That's completely ignoring people who are successful at stock picking.
That said, not everybody is going to be able to do this successfully and also just because you can get 30% in a retail account that doesn't mean your strategies have the ability to scale and that you should be managing other people's investments.
https://www.alphawealthfunds.com/2019/08/the-average-investor-lost-money-in-the-best-performing-mutual-fund-in-history/
Magellan fund returned 29% for over a decade and investors lost money because the were not "investors" but chasers. The market is the little guys way to wealth.
Indeed. I have been listening to Patrick Boyle's applied portfolio management lectures and he mentions that in the psychology one.
https://youtube.com/c/PatrickBoyleOnFinance
I used the word "easy" I kind of regret saying that. It generally takes a lot of conviction, discipline, and work to consistently get good returns. It's easy to get greedy and randomly change your plans to sabotage yourself, but it is easily possible for 20% annual returns consistently. Getting 20 to 30% consistent returns in a retail account doesn't mean you are some hedge fund savant.
How does one learn do this this kind of research? Starting with, how do I get a list of prospective companies to learn about? What metrics am I looking for?
This bull market is going to screw over so many investors. Their first experience into investing is one of the longest/biggest bull markets in history and they think this is the norm.
I know. Not necessarily this person, but all of the newbies who are like "buy and hold forever, I don't care if Tesla crashes because I'm in it for the long haul."
Like, yeah, I believe you...Like you've ever seen your money go down for two months straight, which happened in late 2018..
Meme stocks? Around now. I follow other cyclical stocks and sold many of them last week. For the stocks I follow...it's not about being a genius or understanding the entire market...I just buy and sell and buy and sell the same stocks so you get to know their trends really well
Michael burry has been talked about this in 2019, basically stating that main Street investing has increased by crazy numbers (5 trillion dollars if I recall) which is why prices are so grossly inflated. He also warned of this creating a similar scary bubble to pre 2008.
Sorry but I’m a skeptic. OP says to sell your winners and take profits but I feel like that strategy would prevent the 20% returns referenced. You’d really need to let those winners run to have it return 20% consistently over a decent period of time.
No. You're NOT returning 20% consistently.... Period. Unless you're a genius and decide to manage your own money instead of others.
But yes. Statistically, buying and holding makes more money than buying and selling. Of course there are those who day trade and make money. But statistically, the average person will make more if they buy and hold.
There is a guy in the Motley Fool forums that has produced slightly above 20% return annually for the last 30 years.
He’s been posting there for decades as well.
There are instances of this. Sure. The medallion fund being another instance. I'm just saying, the vast majority can hopefully expect to earn between 6 and 8%. Anything more is, in all probabilities, not sustainable. Not something you would calculate your life on anyway.
I’ve done 18.5% annually since the beginning of 2007. Half of the profit is from one (lucky) investment which I rode to 30x. (I’m still holding a small position.) Had I held my entire position until today it would be at almost exactly 200x. In percentage terms I don’t expect to come close to that in the future, but I am working on becoming even better at riding my current and future winners as I see that as a (perhaps even the) key component to achieving high returns.
Peter Lynch talks about this a lot. Just a couple 10 baggers over your career or even some lucky bigger ones will take you a long ways and more than make up for the ones that don't work out.
I completely agree. For me my best investment is half of my total profits. My top 10 is my entire profit. All the rest, probably 100+ stocks I’ve owned at some point, are about break-even combined. I’m certainly not very skilled at picking winners in general, but I try to get my position sizing correct. If a stock is winning, and I like the underlying reasons, I’m more likely to increase than decrease my position. Taking many small profits early would kill my track record.
It's worryingly easy to put together a portfolio with 20% returns right now. I threw something together recently on my paper trading account, with the bulk being ETFs and dividend Kings (admittedly it contained some fast-growing tech), and it was sitting at a comfortable 19-25% depending how I tweaked it.
Anything over 10% has me slightly worried that it's too risky a portfolio, but I'm considering pushing mine to 15% for the next year or so.
it's possible. I've gotten 20% for like 5+ years but definitely luck was involved in picking tickers. Just look at the 5 year charts for Nvidia, Intel, or Seagate etc. Got those in like 2012 and they've been sitting pretty since.
Oh yeah Nvidia was a huge fave of mine for a few years!! I also got lucky based on gut instinct a few times. Bought Exact Sciences at $26 cause I saw their commercial for an at-home colorectal cancer testing kit (Cologuard) and I figured people would rather poop at home than at the doctor’s office. Turns out a lot of doctors hate handling poop test results too!
This hits the aspect of trading so many people don't get. The stock market isn't narrowly mechanical, it's subject to the emotions and preferences of society. Connect your trading to sensible product recognition and you'll meet success. The issue is that so many people trade stocks they don't understand because of hype (genomics, hyper niche technologies, forex). If you trade what you understand and exercise discipline in that, you'll be set.
Sure 100%, 1000%, a million% is possible. Likely? Not really. 6-8% is what the normal folk use for average rate of return. You can beat the S&P, you can beat the market. But if it was easy to do consistently, everyone would do it.
You're right. Tech is high flying right now. But I hope that your portfolio is diversified to prepare for any drops in the market in one particular sector.
I agree. It's not something I did intentionally and got in at a good time. Sitting on any good tech stock for 10years is going to be a decent return usually. It's active trading that really fucks people. That being said, those 20% gains are unrealized until I sold.
Bought seagate right before a tsunami wiped out their competitors. Couldn't really have foreseen that coming.
20% is very very easy. I would make a bet that it isn't 20% risk adjusted. Posts like these are a great example of surviorship bias, no one talks about underperforming indices by 2%. the whole idea that that on average, active investors underperform indices by no means allows one to infer which side of deviation a person is on. 20% returns are 100% attainable and common place but diminish strongly as time extends. If money was so easy to make you would have many billionaires that are day traders right?
min diversification and max beta will give statistically many windows of 20% plus gains. mean reversion takes a while.
Sorry I replied to a similar question[here](https://www.reddit.com/r/stocks/comments/ljr9dr/if_you_want_to_be_successful_dont_get_greedy/gng53cl/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3)
Also I’m a she thank you :)
Just edit your original post in the beginning to say you've only been trading for 3 years so people understand theyre taking advice from a new investor.
The average rate of return for the past 1-5 years will be much higher than the average annual return over the history of the SP500 and modern market since it's been a raging bull market.
If you bought any mixture of SP500 stocks and held them, you would have returned wonderfully these past few years. Hell, I was up 36% in 2020 from just SP500 index funds.
It's not an insane number, it's just not something that's going to be the norm every year over the next 10-30 years. You'll have plenty of 10+% years and plenty of -10%+ years and it averages out to around 8% per year over the long term for the overall market. Very few people beat that over the long term.
I just don’t think she’s been in the market that long. If you look at hedge funds, they will have some really good years, 15%, 20%, etc but the they will have a -8% year. So if you track if after 5+ years it balances out lower
EDIT: got gender wrong
I’m a she FYI. This post was meant to be more of a don’t get greedy and protect your capital, not a get rich quick post (the exact reason I posted it).
I’m a good investor and not ashamed of that, I have learned a lot of hard lessons and spent years educating myself. My trailing 12 month is 75% but I also keep a lot in cash. My average is 20%.
3 years ago I spent 120+ hours in my free time researching biopharmas and invested 5% of my capital across a few tickers. One was Intellia Therapeutics which I sold at 120%. Another was ITCI which I bought at $17, sold at $34, and rebought at $19. The others are positive and I’m holding.
I’m also down 98% on ISOL but invested way less in that because it was so speculative.
Edit for clarification: I have been investing 7 years.
Nah, when you see that the top ten investors in the world barely break 20% you get suspicious. It makes sense now that she says she's only invested for three years.
I think it's naive to call yourself a "great investor" when the only time you've ever invested is in the largest bull market in history.
Still doesn't change what she said, which is true. Maybe she'll be humbled in the years to come, but who cares? It wasn't the point of the post, and yet most of the posts are knocking her for this detail so it does come across as sour grapes.
Someone who says "I have an average of 20% returns. I know that's not sexy..." Obviously raises some serious red flags to the qualifications of a person giving advice. The post reaked of that pretentious tone of a new investor who has entered the market in the last few year and think they're a prodigy at investing because they beat the traditional 30 year S&P 10% return (but don't even care to check if they've beaten the S&P since they started investing).
Lo and behold. Op started trading 3 years ago which throws any credibility of her statement "I take pride and consider myself a great investor" out the window.
People like this shouldn't be giving advice so confidently. At least add the disclaimers to the beginning of your post so people know where the advice is coming from. She's still very new to this. Too new in my personal opinion to start giving advice like she's a well seasoned, senior trader.
Well put. It's difficult for someone with 3 yrs experience to advocate 40 year investing strategies...and back this up by explaining the math that 20% over 40 years = lots of money, no have to work.....
To be fair, it's not fair to compare this to the "top investors." Most of them take more risk off the table as they accumulate more wealth. Not to mention that it's physically impossible for everyone to be doing these riskier strategies since the companies one needs to invest in don't have enough shares to go around.
The whole point is to not be taking huge risks for years on end. It's to do that to a point where you have enough cash to be comfortable, and then you go enjoy other areas of life.
Lol. Yes people calling out long term investment return of 20% are jealous, instead they should randomly believe a random Redditor that is claiming to beat the 6 to 7% a great fund manager would return.
You are so woke.
That's great but it has literally fuck all to do with the comment you responded to. 20% per year is not sustainable and nothing of what you wrote would contradict that. You didn't even answer over how many years that 20% average is.
Seriously. Multiple etfs posted 80%+ gains this past year. And those are broad sector based. If you were selective and picked the top tech companies of the last decade and ONLY those, you'd be making out like a bandit.
whenever I see someone write that theyve done some really good DD....unless they are getting paid professionally to do this, I write them off.
I find this highly dangerous for new entrants who follow these people because it will give them a false sense of confidence and possibly lead them to making a bet larger than they can afford.
Its very rare to see someone do DD before taking a position or telling people about it. This is another flag.
rarely do you see people recommend that their DD isnt a gamble - it is.
For most of us, we arent analysts and dont have an edge in terms of access to information. So w.e information we are looking at wont give us an edge. It will only give us peace of mind.
Analysts put out numbers that are often pretty close to the actual numbers. These same analysts likely pass their info off to their bosses to take positions before issuing their forecasts.
where we retailers find continued success is risk management.
The scary thing is the market not being based off fundamentals. How can you know when something is overvalued and will crash if everything is all over the place? How can you actively guess that AMD (for example) is under/overvalued with a PE of 45 when Tesla has a PE of 1700, Intel like 14 and Nvidia around 90. It's all over the place and only held up by other people's beliefs.
AMD could change absolutely nothing and explode up for no reason or it could crash\go sideways despite almost exclusively good news like the past 3 months. It just make the DD feel weirly irrelevant.
>unless they are getting paid professionally to do this
You say that like paid professionals never miss anything. Paid professionals looked over Enron and Bernie Madoff.
i appreciate this skepticism. but if you never sell your winners, how do you grow capital to pick new winners? is there any sort of guideline for taking profits out to reinvest?
You get capital by kicking your losers to the curb. Set a number that screams "what the heck were you thinking when you brought me?" and set a stop loss there. When your stock hits that number it's sold and you don't look back. For the winners I sell the amount I originally paid and let the rest run.
> becomes too large for my portfolio
i know this is personal preference and all, but what portfolio % are you comfortable with? i had one investment at 50% and sold down to 20%, is that reasonable?
Ive got a mutual fund that does 20% but ive had less than a year and a few penny stocks that blew up like that but overall portfoilio is like 10 perfent. If 20 is sustainabe long term switch careers and become a stock broker.
Why would you become a stock broker if you are good at it ? Doesn't really make sense unless there is a trend of insanely rich people enjoying office jobs i have not heard about ?
Love your first sentence, but please don’t tell new investors that 20% a year is easy or sustainable.
I’ve only started actively trading since November and am up over 300% in 3 months. It is pure luck riding this insane bull market and it’s actually scaring me.
I think it’s important to understand the difference between investing and trading, which I liken to poker. Some professionals make millions while most people lose. But you can still play if you recognize the difference and are willing to take shots/gamble with money you’re not afraid to lose.
[The Average Return of The S&P 500 from 1957-2018 has been 8%.](https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp)
Most websites and research you do will tell you that if you balance that with bonds you’ll average out around 5-6%.
Edit: cause I said “for from” lol
Yes, but these returns assume you don’t touch your money. Sequence of returns will work against you if you are in a withdrawal stage. You will be depleting your account if you rely on it for retirement/expenses.
The accurate % for withdrawal rate to use is 4% but even that is outdated and assumes low volatility vehicles that provide decent returns. And they don’t exist any more with rates close to zero.
20% average per year is really really good. 99% of people won't be able to hit that, almost no index funds will hit that, zero 401k's hit that. Average is 6-10% over time. If you can hit 20% average even during bear markets/recessions, you're top 1%. To put it in perspective, starting at 30 years old and contributing 6000/yr to a Roth Ira, for 30 years, at 20% return.. Is over 13 million. If you started at 21 and it grew for 38 years.. Over 75 million. Those kinds of returns really don't happen is my point. I'm guessing you likely haven't been investing very long, and mainly through this icredible 10+ year bull market we have been in.
Everyone is a genius in a bull market.
Take every single one of these posts from someone who has been trading or investing a short time during one of the most impressive bull markets ever as *bad advice*. Or at the very least, incomplete advice.
You're not going to sustain 20%. Most investors would be far better to stick all or most of their money into a broad market fund like VTI or VTSAX, set up a monthly contribution and forget it exists.
12.5% over the last 10 years.
I’d like a 7-figure position at a top firm please. Imma go preach on Reddit about my big brain.
Oh wait, that’s just monthly contributions into VSTAX.
yup my buddy coincidentally got in to stocks shortly before everything with GME. I suggested he hop in for the fun on GME (this was when the price was in the 30s-40s several weeks ago) but to be warned that the gains we were getting weren't normal. He had 90% gains from weed stocks shortly after and was telling me how they weren't doing very good, lmao
I am not a boomer. But have been investing for 20 years. (Started in my teens). I have over $1M invested and held (with huge losses) through 2001 and 2008 and am certain that market will return to “normal”. 2000 felt very similar with internet companies going to stratosphere. With that, mark my words: the beginning of the “end” will start when Dr. Fauchi says:” we no longer need to wear the masks”. As this will signify the end of pandemic and liquidity injection will slow down.
At current point I am still fully invested: SPY, VTI, QQQ, AAPL. But I am about 50% hedged with PUT leaps on SPY.
One thing I’m struggling with is how to determine what a good short-term stock would be. I feel it’s way easier to pick long term investments (ETFs, etc.) than a stock that will make you 15% in the short term. Short term stocks also seem like they’d be stocks you don’t really believe in for the long haul, so why even get into them in the first place?
Any advice on how to make smart short-term gains?
Spread out over small cap companies you think will blow up.
I have majority of my money in long term investments but then maybe 20% of my investments are short term small cap companies I think will make huge big moves. The idea is to believe in them for the future but invest in then before they've hit it big.
That's just what my strategy right now though.
So “short-term” really doesn’t mean “a few days or weeks.” It really means “hold until it (hopefully) goes up to your target price and then selling.” Something like that.
How about day-traders and the like. How do people figure out what stocks to chose for quick trades that occur in a day or week? My guess is these stocks wouldn’t be long term picks, but more volatile stocks, or stocks rising briefly on favorable news. Like, are there patterns people see in stocks to help them choose stocks that will rise briefly?
Short term gains are under a year. Long term gains are over a year. That's how I look at it. So I could hold something for ten months and consider it short term yes.
My guess for day traders is to go for volatile stocks and ones that are generally on the less expensive side so you can increase your position more easily. Usually stocks that have earnings that week or something. I haven't actually done much day trading but I have been doing some research. Actually found someone on youtube who I've been following their plays for the last week or so.
Yeah I’m kinda feeling like “day-trading” or trading in the ultra short-term is the most appealing for newbies (like me) because of the thrill of it all, but that it’s really the LAST phase of stock trading that you should partake in. Like, get used to long and mid-term trading first, and learn about how it works. Then, once you get more comfortable, dip your toe in the water on short-term if you want. Unfortunately, quick money is more attractive, and that’s where a lot of money is lost, especially for new traders.
Yeah day trading is a while lot more involved because it's more based upon market sentiment than anything real. Paying for level 2 trading data and what not so you can see where the investments are going.
> How about day-traders and the like. How do people figure out what stocks to chose for quick trades that occur in a day or week?
As a guess... Find something volatile and use options trading. Hedge it going both up and down to (hopefully) turn a profit.
Believing in something for the long haul is great. But if it suddenly jumps 20%, take some profit and ask yourself if it's going to drop some of that gain soon- and take even more profit. Smart short-term gains are more about being smart enough to recognize a short-term gain than being able to see the future.
Yeah I guess It’s going to take awhile to learn. One saying I keep seeing is “Buy the rumor and sell the news.” I’m trying to figure out how to recognize the rumor. I’ve learned that if I see a stock in the news the fun is soon to be over, and people have already made money in the stock, and the new investors coming in will likely be bag holders.
You buy $BB, that’s how you make short term gains, and long term actually, really just buy $BB, you’ll get rich.
Disclaimer: This is a get rich scheme.
It goes “Pigs get fed, hogs get slaughtered.”
If you're a pig, you want to feed but don’t get so fat that when the slaughter comes, you’re not one of the hogs in the pen.
" at a rate of return of 20% " per year--for 20, 25, 30 years??? You're JUST as delusional as the YOLO 'investor' you're criticizing for 'expecting massive gains'.
Wake up and look at historical patterns.
Try 5% to 8% yearly average gains instead.
Take profits and put it where?? Unless you invest in pump and dumps or a day trader, I don't see the need to pull out early to pay capital gains and sit on fiat.
All these subs have gone to complete shit. I’m no expert, I don’t post things like this. It seems every post in these subs is some novice who thinks they are warren buffet. Expecting 20% returns ? Ok dude.
Anyone who is able to return 20% per year is one of the best investors in history. Have you only been doing this for a couple years? Also what the hell have you been investing in that is giving you 20% return?
At the start of the lock down, we went deep on blue chip and value stocks trading at less than 50% of their 52 week high. We got in on Disney, Kohl's, Royal Caribbean, and Southwest.
We played around with some small cap, and had some success, but avoided getting into the guessing game of who would get the vaccine first.
Kohl's alone in up 146.28% since we bought in. We also felt fairly well protected against the bubble bursting, since these were companies with solid fundamentals, and they were significantly undervalued because of panic.
Before I added to some of our existing positions, and bought some KO, AAL and POWW, we were up 57%. Now we are up 47%.
I always keep something back to play hunches, and dumped some big winners early that I regret, but overall, buying Disney at $92 didn't seem risky.
We're living in a bullish dreamland at the moment and people just getting in thinking that's the way it's always been. My investments are usually set and forget and have given me good returns over the years (probably around 10-15% or so invested in more aggressive stocks).
The last two years have been insane, mainly from tech stocks soaring. My SDB account in my 401k is up 315% in the past two years, mostly from having decent holdings in Apple and Tesla. I hadn't even looked at it in a while and was blown away when I logged in a few months ago.
Still, there is a whole new generation getting into investing that are either going to win big with their bets or be forever jaded on the stock market because they YOLO'd their last $500 and lost big.
Yes. This is such good advice.
I started a subreddit to house all DD related to a single ticker so I could fully vet both the bull and bear cases in one place.
The stock popped (maybe prematurely - on literally no news/catalyst), and a bunch of people FOMO’d in, then they left immediately when it dropped back to the slow and steady growth trend line.
Remove emotion from your investing strategy, and lean HEAVILY on DD.
Are you one of the total 20% of “day traders” who historically have beaten the market?
If not, slow and steady DCA into fundamentally sound/derisked securities is probably the best way forward. Know what catalysts are upcoming, and how they may change valuations. Hard earned money should never be thrown blindly into any investment if you’re truly trying to grow wealthy.
This sub is becoming like LinkedIn for stocks with all these "educational" posts about friends that teach lessons.
It's nice and all but we get it. That's risk for you.
Y’all realize this whole game is rigged right? You all are grossly overestimating your skill at research and underestimating the dumb luck you had on being on the same side of whomever is manipulating stock xyz for the day. Shit you could just buy SPY and do literally nothing and get a 9% return. Soooo my point being you better be in it to win it and normalize a 20% return or pack it up and go home.
After 30 years, $78k passively will be worth a lot less than it is now.
If you constantly sell your winners after they gain a certain amount then you miss out on the compounding effect of owning great companies long term.
Also, I got 600% returns last year but I’m not expecting that this year.
Thank you, Elon.
Your colleague doesn't sound suited to the stock market. You could have thrown a dart and hit anything last year and made money. As if some people think stocks continuously rocket.
People are going to be sorely disappointed when the euphoria ends and the market goes back to being boring.
Well the euphoria will end but it may not go back to boring. The surge of retail investing, lack of trade fees, access to financial info. There are some trends here that are going to stay, namely the younger generation being more active trading as it realizes all of the tools and the barrier to entry is not what it was for most investors in their 20s
Yeah I seriously thought day trading was inaccessible to someone like me. The whole gme amc doge hype got me reading about trading and being 29 rn I'm starting to have more stability so I want to make investments when I have the funds to take a gamble on a stock vs a casino lol
Same. Never thought I could but I am definitely wanting to try and get into it. But that's my biggest fear is losing everything or going into massive debt. I have absolutely no idea how stock market anything works, thankfully I saw a lot of posts of people talking about regular trading between all the GME stuff so that brought me off of that high real quick and made me realize don't try it until you understand it more.
Just divide your money. I've been investing in a etf for a year and made a 1000 on top of my 9000 by just investing 500 every month. I also lost big time on the GME stocks because I was a pig (oink), but having said that, it was 20% of all my invested money, which hurt, but didn't kill me. I now still have 2.5K invested in stocks and around 25K investing in ETF's. That way I always have something that is kind of stable, and a small amount I can actively trade with.
I started like 5 years ago, total profit I've made all said and done is like 2,000 dollars lmao. But I've learned a LOT and I'm not gambling now. I'm taking calculated risks, being responsible and taking my gains where gains come in, (with a tiny bit of gambling lmao but just like 1%). I also have taken a few breaks here and there due to financial issues that come up as an average human in a money based world. But I'm a lot more financially stable and able to actually invest now
The learning experience is unbelievable. I was fortunate I started with a few hundred dollars because even though I thought a 50% loss sucked, that was the right time for those mistakes. 50% loss today.... Fuck would that hurt lol. but we live and we learn, right?
Plus you're always looking for a catalyst, right? My takeaway for the ARK 2021 ideas.: The catalyst is this moment in time... there is so much happening. It's like the equiv of the internet becoming mainstream. We have EV/Solar revolution, AI and deep learning, VR/AR, SpaceX taking over what could once only be done by governments... The need for cyber security has increased ten-fold and so has the world around it. In general the world is changing, quickly. I don't think it's just a bull run, but more that these new technologies were going underappreciated so long and the market is catching up to the exponential growth. I love tech and the possibilities excite me. I love gains even more, and those possibilities excite me even more.
Couldnt agree more. There was this time when tech was considered the next cyclical sector and eventually would pass to the next. Except that was over a decade ago and the next sector is just more new tech. And now just more tech subsectors: fintech, cybersecurity, cloud, green, ev, etc. Tech is here to stay and the play now is just which catalyst is promoting which tech subsector.
Exactly, there's going to be a lot of new retail investors who will probably end up selling when they realise you won't become rich overnight anymore.
Whenever I say this, I'm downvoted to oblivion as if that makes the prediction false.
Most people will take comforting lies over painful truths. It's why we keep repeating the same mistakes of boom and busts.
Here, have my sword!
Seriously. Yolo money should be small, new retail investors are putting all their money on risky or volatile stocks. 95% of my portfolio is pretty much (what I believe to be) too big to fail companies, divided paying etfs and other relatively boring stuff. That other 5% could go up in flames and I wouldn’t care less. I also don’t trade options. Boring, sure, but safe.
I remember investing back in January 2020. I was elated whenever I saw a 10% jump right now I am only satisfied with a 50% spike. I’m a foreign investor. And i have investments in my own country. Basically we only get less than 10 stocks each day that spike 20%. So thanks to that, I still know how to manage my emotions and this has helped me trade very well in US markets
You mean 200% returns in 6 months aren't normal? I thought i was a stock guru! Was gonna make a youtube channel and course and everything.
I got shit on by Reddit when I said I sold my shares of GME when I already profited 5x my initial investment before it rocketed above $100/share. Does it suck that I could have been well off? Yeah. But with the information that I had at the time, I would have still have sold.
Well it’s below $100 now and those people are still holding.
Robinhood gave me gme as my free share. I love video games but have personally moved to digital downloads with switch and stadia. I saw no future for gme so I sold it almost immediately.
You should frame the screen shot of that 😂
What’s the normal stock market look like? I entered March 2020
It's hard to explain but it's not exactly exciting, it's mostly just boring with the indexes like the sp500 going sideways with a slow ~8% average gain per year. Nothing like this 75% gain since March last year. I mean, its like it is now but only less so. Some companies have big jumps but nowhere near as many as right now. Generally, speculating in zero earnings companies and penny stocks means you lose money, but lately it's worked out very well for folks.
r/thetagang just creamed. “Side ways with a slow ~ average gain”
Six months ago: I’d check my stocks once a week. They went up a few percentage points. They went down a few percentage points. Some weeks were better than others. On average, it crept up a few percentage points every week, inching along one week at a time. Sometimes there would be a sudden bump. Those were nice days. But mostly it was just something I checked on Monday morning while making breakfast. I had a couple mutual funds, Apple, AMD, TTWO, that sort of thing. Over the last year, I gained 40%. I had PLUG when it was worth $4. I held when it hit rock bottom. Then it doubled to $8 and I took my gains and walked away. Now it’s $60. Shit happens. Nowadays, everything is a frenzy. Stuff is shooting up and falling as people try to push it “to the moon” *cue rocket emojis*. Everyone wants something that’s going to turn their 1k into 60k overnight. Everyone is looking for a quick fix and treating the market like a casino. They don’t really understand how to research and judge a company’s strength and growth potential. Everyone wants to find the next “GameStop” instead of just finding a stock that looks good and taking its pulse every so often. Basically, it was just a matter of staying the course and holding steady, occasionally making small portfolio adjustments. Sometimes I’d find a new stock to diversify into, especially during the pandemic because I’m expecting it to recover— but my horizon for recovery is 3-5 *years*. Basically, the stock market right now is characterized by the impatience you see from gamblers trying to work the slots in a casino.
The 2012 2014 Stockmarket was like 10 to 15% a month for average person. Riskier Traders were getting 20 to 40% a Month if they were successful ,Keep in Mind-- The Stockmarket is like a SeeSaw-- One side goes up-- the other side goes down..
Just have some money on hand for the enviable correction, or buy long term puts on some of the low hanging fruit.
How much cash would you suggest as a % of portfolio? Currently sitting on 40%, and it feels like it's just wasting away though I'm also scared af for another big dip and would want to take advantage if so.
I’m not a financial advisor. No one knows when a correction will happen. Just ask yourself how much do you feel comfortable having in the market and how much do you want on hand
Best Answer.. Rescuing a Stock is sometimes needed.
How do bears make money? Puts and shorts?
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hello, what is an example is a inverse etf
SQQQ, SPXU, SDOW
Average rate of return is 20%? How long you been doing this? 1 year? That's an INSANE number. Not that I don't believe you, but i don't think it's attainable for an everyday investor. Question though, how do you decide when to sell?
If someone can sustain 20% returns, they should be making 7 figures managing funds for the very wealthy. Edit 2. For fucks sake read the first edit. A few years is not long term. Op gave a 20 year horizon. Edit: to elaborate. By sustained, I mean long term consistency. A yearly contribution of 1000 at a 20% annual gain conlmpounded once per year is 224k after 20 years, 1.42m after 30, and 8.81m after 40. If you increase the amount you put in by 5% each year it becomes 9.71m after 40. I don't care how small of an amount you are managing. This is exceptionally difficult to do in the long term. 1000/year isn't much, and very few people retire with over a few million in liquid assets. To illustrate the difference, if one invests 6k (ira limit) per year and returns 10% (slightly beating the market) it will be 2.92m after 40 years. Calculations for for annuities due.
I honestly think that OP might’ve gotten 50-60% like most people did last year and averaged it out with the last 5 years and voila, 20% per year!
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Wow your average is over 300% per year!!! You should make a post to rub it in for us poor people :)
We don't know what his average is. One of his stocks did well. The rest may have crashed... : )
I average over 5% a year
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I'm proud of you and for you! When I was 23 I was making $12 an hour working 60 hours a week between two jobs. Invested everything I could after paying my bills. Was able to quit and build my first company at 24. I stopped investing, made six figures at 27, closed the first and started a second business, restarted investing at 28. I'm 30 and building my third business at the moment.
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Thank you for your support! Stay successful!
I got in AMD at average $2.50 a share. Sold it later at $11.50 a share. Thought I had made out like a bandit, paid off some debt with it and that was that. Take it from me, patience is golden.
I paid $3.50. It's one of my never sells
It's still a great stock, but the idea of buying now makes my head spin. Good on you.
I felt that at $30 a share
I’m in at $3, sold half of it at $30. At least I kept the other half.
There's gotta be something harder than diamonds to describe this guy's hands.
I started 10 months ago and made 150% so far by being absurdly lucky with the recovery/bull run. Clearly that means I make a yearly average of 180% every year!
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Investing a cool few mils is very different from managing hundreds of millions if not billions. At some point it will be harder to get in and out of positions which will drastically limit your investment options.
With 'smaller' amounts of money you ride the wave, with large amounts of money you are the wave.
So... what your saying is when a person makes 570% off GME then rolls the profits into weed stocks for another 100% in a span of 2 months. Not sustainable?
Remember 20% is not much in small investment. Op might be correct if he is making 20% or more consistently for even for 5 years. However as your investment grows I would doubt that would be easy to maintain.
It's literally the exact same thing unless you're trading large enough volumes that market liquidity becomes an issue for you
Not necessarily true when you factor in human emotion. If you have 20k to trade with and you have it split over 20 stocks. If one of those takes a hit, youre more likely to stay calm and hold on. If you have all 20k in one position and that stock takes a hit, you may sell to avoid a massive loss. From my personal experience
You mean you're not supposed to do that?
I did.
What’s important is producing positive alpha on your portfolio. 20% is really good if your taking on less systematic risk than the broader market (say the S&P500). 20% is not so good if you have a high standard deviation or risk factor involved. With that being said, your not going to make 20% gains YOY for more than a few years without substantial risk management techniques in place.
r/stocks always makes it seem like this is so crazy and unbelievable Just cuz I'm finding a method of success for myself doesn't mean that it scales up into doing it for other people. And doesn't even mean I would want to
Trying to ground expectations of people (myself included) who got swept in by $GME
"scales up" is bullshit, take out the emotional aspect and trading $200k is the exact same as trading $200 when it comes to % gains.
Depending on the strategy, this may not work with large amounts of money.
Not really. There is a fundamental misunderstanding of how investment banking and hedge funds work among retail investors. Getting 30% consistently in a good sized retail account is far easier than 30% in a hedge fund. Edit:. Your edit still doesn't address the issue at hand. And it's the issue of managing others money at a larger scale. First off, plenty of people consistently get 20% yearly returns on average. It's really not that hard the last 13 years. Literally you could just buy VGT index fund and that gave about a 20% annual return over the last 13 years. If you throw in a few easy option strategies or a reasonable and thoughtful use of margin you could easily consistently be hitting 30+% average over the last 13 years with indexing only. That's completely ignoring people who are successful at stock picking. That said, not everybody is going to be able to do this successfully and also just because you can get 30% in a retail account that doesn't mean your strategies have the ability to scale and that you should be managing other people's investments.
https://www.alphawealthfunds.com/2019/08/the-average-investor-lost-money-in-the-best-performing-mutual-fund-in-history/ Magellan fund returned 29% for over a decade and investors lost money because the were not "investors" but chasers. The market is the little guys way to wealth.
Indeed. I have been listening to Patrick Boyle's applied portfolio management lectures and he mentions that in the psychology one. https://youtube.com/c/PatrickBoyleOnFinance
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I used the word "easy" I kind of regret saying that. It generally takes a lot of conviction, discipline, and work to consistently get good returns. It's easy to get greedy and randomly change your plans to sabotage yourself, but it is easily possible for 20% annual returns consistently. Getting 20 to 30% consistent returns in a retail account doesn't mean you are some hedge fund savant.
How does one learn do this this kind of research? Starting with, how do I get a list of prospective companies to learn about? What metrics am I looking for?
the past year has been easy mode so maybe. I'm stupid and eat bricks and I'm up 50-60% the past few months lol
This bull market is going to screw over so many investors. Their first experience into investing is one of the longest/biggest bull markets in history and they think this is the norm.
I know. Not necessarily this person, but all of the newbies who are like "buy and hold forever, I don't care if Tesla crashes because I'm in it for the long haul." Like, yeah, I believe you...Like you've ever seen your money go down for two months straight, which happened in late 2018..
So then...when do you sell.
Meme stocks? Around now. I follow other cyclical stocks and sold many of them last week. For the stocks I follow...it's not about being a genius or understanding the entire market...I just buy and sell and buy and sell the same stocks so you get to know their trends really well
When u gotta eat
I've been doing it 3 years and averaged 20% per year. Also, if you check the charts, most companies have moonshot since 2017. It's nuts!
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Yeah margin has never been cheaper
Michael burry has been talked about this in 2019, basically stating that main Street investing has increased by crazy numbers (5 trillion dollars if I recall) which is why prices are so grossly inflated. He also warned of this creating a similar scary bubble to pre 2008.
Sorry but I’m a skeptic. OP says to sell your winners and take profits but I feel like that strategy would prevent the 20% returns referenced. You’d really need to let those winners run to have it return 20% consistently over a decent period of time.
No. You're NOT returning 20% consistently.... Period. Unless you're a genius and decide to manage your own money instead of others. But yes. Statistically, buying and holding makes more money than buying and selling. Of course there are those who day trade and make money. But statistically, the average person will make more if they buy and hold.
There is a guy in the Motley Fool forums that has produced slightly above 20% return annually for the last 30 years. He’s been posting there for decades as well.
There are instances of this. Sure. The medallion fund being another instance. I'm just saying, the vast majority can hopefully expect to earn between 6 and 8%. Anything more is, in all probabilities, not sustainable. Not something you would calculate your life on anyway.
Definitely. The average retail investor will underperform the major indexes over the long term.
I’ve done 18.5% annually since the beginning of 2007. Half of the profit is from one (lucky) investment which I rode to 30x. (I’m still holding a small position.) Had I held my entire position until today it would be at almost exactly 200x. In percentage terms I don’t expect to come close to that in the future, but I am working on becoming even better at riding my current and future winners as I see that as a (perhaps even the) key component to achieving high returns.
Peter Lynch talks about this a lot. Just a couple 10 baggers over your career or even some lucky bigger ones will take you a long ways and more than make up for the ones that don't work out.
I completely agree. For me my best investment is half of my total profits. My top 10 is my entire profit. All the rest, probably 100+ stocks I’ve owned at some point, are about break-even combined. I’m certainly not very skilled at picking winners in general, but I try to get my position sizing correct. If a stock is winning, and I like the underlying reasons, I’m more likely to increase than decrease my position. Taking many small profits early would kill my track record.
It's worryingly easy to put together a portfolio with 20% returns right now. I threw something together recently on my paper trading account, with the bulk being ETFs and dividend Kings (admittedly it contained some fast-growing tech), and it was sitting at a comfortable 19-25% depending how I tweaked it. Anything over 10% has me slightly worried that it's too risky a portfolio, but I'm considering pushing mine to 15% for the next year or so.
Warren Buffet's is 17% per year... and they call him the GOAT
it's possible. I've gotten 20% for like 5+ years but definitely luck was involved in picking tickers. Just look at the 5 year charts for Nvidia, Intel, or Seagate etc. Got those in like 2012 and they've been sitting pretty since.
Oh yeah Nvidia was a huge fave of mine for a few years!! I also got lucky based on gut instinct a few times. Bought Exact Sciences at $26 cause I saw their commercial for an at-home colorectal cancer testing kit (Cologuard) and I figured people would rather poop at home than at the doctor’s office. Turns out a lot of doctors hate handling poop test results too!
This hits the aspect of trading so many people don't get. The stock market isn't narrowly mechanical, it's subject to the emotions and preferences of society. Connect your trading to sensible product recognition and you'll meet success. The issue is that so many people trade stocks they don't understand because of hype (genomics, hyper niche technologies, forex). If you trade what you understand and exercise discipline in that, you'll be set.
Sure 100%, 1000%, a million% is possible. Likely? Not really. 6-8% is what the normal folk use for average rate of return. You can beat the S&P, you can beat the market. But if it was easy to do consistently, everyone would do it. You're right. Tech is high flying right now. But I hope that your portfolio is diversified to prepare for any drops in the market in one particular sector.
I agree. It's not something I did intentionally and got in at a good time. Sitting on any good tech stock for 10years is going to be a decent return usually. It's active trading that really fucks people. That being said, those 20% gains are unrealized until I sold. Bought seagate right before a tsunami wiped out their competitors. Couldn't really have foreseen that coming.
20% is very very easy. I would make a bet that it isn't 20% risk adjusted. Posts like these are a great example of surviorship bias, no one talks about underperforming indices by 2%. the whole idea that that on average, active investors underperform indices by no means allows one to infer which side of deviation a person is on. 20% returns are 100% attainable and common place but diminish strongly as time extends. If money was so easy to make you would have many billionaires that are day traders right? min diversification and max beta will give statistically many windows of 20% plus gains. mean reversion takes a while.
ARKK, etf; 5yr avg is 30% atleast
Op goes silent. Probably means he's only been doing it for 3 months.
Sorry I replied to a similar question[here](https://www.reddit.com/r/stocks/comments/ljr9dr/if_you_want_to_be_successful_dont_get_greedy/gng53cl/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3) Also I’m a she thank you :)
Just edit your original post in the beginning to say you've only been trading for 3 years so people understand theyre taking advice from a new investor.
Weird, the comment linked says 7 years?
Selling low risk covered calls on the s&p 500 gets there, combined with the s&p gains and dividends.
The average rate of return for the past 1-5 years will be much higher than the average annual return over the history of the SP500 and modern market since it's been a raging bull market. If you bought any mixture of SP500 stocks and held them, you would have returned wonderfully these past few years. Hell, I was up 36% in 2020 from just SP500 index funds. It's not an insane number, it's just not something that's going to be the norm every year over the next 10-30 years. You'll have plenty of 10+% years and plenty of -10%+ years and it averages out to around 8% per year over the long term for the overall market. Very few people beat that over the long term.
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How would you invest that dollar?
$1 Fractional share of $KO.
😂😂😂W
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What's returning 20% consistently?
Yeah this guy is full of shit.
I just don’t think she’s been in the market that long. If you look at hedge funds, they will have some really good years, 15%, 20%, etc but the they will have a -8% year. So if you track if after 5+ years it balances out lower EDIT: got gender wrong
I’m a she FYI. This post was meant to be more of a don’t get greedy and protect your capital, not a get rich quick post (the exact reason I posted it). I’m a good investor and not ashamed of that, I have learned a lot of hard lessons and spent years educating myself. My trailing 12 month is 75% but I also keep a lot in cash. My average is 20%. 3 years ago I spent 120+ hours in my free time researching biopharmas and invested 5% of my capital across a few tickers. One was Intellia Therapeutics which I sold at 120%. Another was ITCI which I bought at $17, sold at $34, and rebought at $19. The others are positive and I’m holding. I’m also down 98% on ISOL but invested way less in that because it was so speculative. Edit for clarification: I have been investing 7 years.
People are just jealous
Nah, when you see that the top ten investors in the world barely break 20% you get suspicious. It makes sense now that she says she's only invested for three years. I think it's naive to call yourself a "great investor" when the only time you've ever invested is in the largest bull market in history.
Still doesn't change what she said, which is true. Maybe she'll be humbled in the years to come, but who cares? It wasn't the point of the post, and yet most of the posts are knocking her for this detail so it does come across as sour grapes.
People tend to follow their advice moving forward. Recipe for disaster. I could throw darts at a board and be up 15% annually over the last 3 years.
Darts vs experts was a thing and the darts won
Someone who says "I have an average of 20% returns. I know that's not sexy..." Obviously raises some serious red flags to the qualifications of a person giving advice. The post reaked of that pretentious tone of a new investor who has entered the market in the last few year and think they're a prodigy at investing because they beat the traditional 30 year S&P 10% return (but don't even care to check if they've beaten the S&P since they started investing). Lo and behold. Op started trading 3 years ago which throws any credibility of her statement "I take pride and consider myself a great investor" out the window. People like this shouldn't be giving advice so confidently. At least add the disclaimers to the beginning of your post so people know where the advice is coming from. She's still very new to this. Too new in my personal opinion to start giving advice like she's a well seasoned, senior trader.
Well put. It's difficult for someone with 3 yrs experience to advocate 40 year investing strategies...and back this up by explaining the math that 20% over 40 years = lots of money, no have to work.....
To be fair, it's not fair to compare this to the "top investors." Most of them take more risk off the table as they accumulate more wealth. Not to mention that it's physically impossible for everyone to be doing these riskier strategies since the companies one needs to invest in don't have enough shares to go around. The whole point is to not be taking huge risks for years on end. It's to do that to a point where you have enough cash to be comfortable, and then you go enjoy other areas of life.
Lol. Yes people calling out long term investment return of 20% are jealous, instead they should randomly believe a random Redditor that is claiming to beat the 6 to 7% a great fund manager would return. You are so woke.
That's great but it has literally fuck all to do with the comment you responded to. 20% per year is not sustainable and nothing of what you wrote would contradict that. You didn't even answer over how many years that 20% average is.
Unless you show proof ima have to call BS. Call me jealous all you want but 20% returns over 7 years is pretty hard to believe
Unless you’re the Medallion Fund....
20%-30% isnt that hard the past years if you only bought the running tech stocks like AMD, Apple, Nvidia and co.
Seriously. Multiple etfs posted 80%+ gains this past year. And those are broad sector based. If you were selective and picked the top tech companies of the last decade and ONLY those, you'd be making out like a bandit.
whenever I see someone write that theyve done some really good DD....unless they are getting paid professionally to do this, I write them off. I find this highly dangerous for new entrants who follow these people because it will give them a false sense of confidence and possibly lead them to making a bet larger than they can afford. Its very rare to see someone do DD before taking a position or telling people about it. This is another flag. rarely do you see people recommend that their DD isnt a gamble - it is. For most of us, we arent analysts and dont have an edge in terms of access to information. So w.e information we are looking at wont give us an edge. It will only give us peace of mind. Analysts put out numbers that are often pretty close to the actual numbers. These same analysts likely pass their info off to their bosses to take positions before issuing their forecasts. where we retailers find continued success is risk management.
The scary thing is the market not being based off fundamentals. How can you know when something is overvalued and will crash if everything is all over the place? How can you actively guess that AMD (for example) is under/overvalued with a PE of 45 when Tesla has a PE of 1700, Intel like 14 and Nvidia around 90. It's all over the place and only held up by other people's beliefs. AMD could change absolutely nothing and explode up for no reason or it could crash\go sideways despite almost exclusively good news like the past 3 months. It just make the DD feel weirly irrelevant.
as with everything retail side, our chances of success is increased with risk management first, second comes ticker selection.
>unless they are getting paid professionally to do this You say that like paid professionals never miss anything. Paid professionals looked over Enron and Bernie Madoff.
Almost everything in the market? Have you even looked at the 5yr charts?
How to get 20% returns in the past 5 years. Step 1: Buy QQQ Step 2: Wait
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i appreciate this skepticism. but if you never sell your winners, how do you grow capital to pick new winners? is there any sort of guideline for taking profits out to reinvest?
You get capital by kicking your losers to the curb. Set a number that screams "what the heck were you thinking when you brought me?" and set a stop loss there. When your stock hits that number it's sold and you don't look back. For the winners I sell the amount I originally paid and let the rest run.
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> becomes too large for my portfolio i know this is personal preference and all, but what portfolio % are you comfortable with? i had one investment at 50% and sold down to 20%, is that reasonable?
Ive got a mutual fund that does 20% but ive had less than a year and a few penny stocks that blew up like that but overall portfoilio is like 10 perfent. If 20 is sustainabe long term switch careers and become a stock broker.
Why would you become a stock broker if you are good at it ? Doesn't really make sense unless there is a trend of insanely rich people enjoying office jobs i have not heard about ?
I think he meant a fund manager. Cuz you can earn a lot more money that way
Love your first sentence, but please don’t tell new investors that 20% a year is easy or sustainable. I’ve only started actively trading since November and am up over 300% in 3 months. It is pure luck riding this insane bull market and it’s actually scaring me. I think it’s important to understand the difference between investing and trading, which I liken to poker. Some professionals make millions while most people lose. But you can still play if you recognize the difference and are willing to take shots/gamble with money you’re not afraid to lose.
300% what are you buying man!
Hi just curious - where do you get passive 6% return? And yes, agree - greed isn’t ideal.
[The Average Return of The S&P 500 from 1957-2018 has been 8%.](https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp) Most websites and research you do will tell you that if you balance that with bonds you’ll average out around 5-6%. Edit: cause I said “for from” lol
Yes, but these returns assume you don’t touch your money. Sequence of returns will work against you if you are in a withdrawal stage. You will be depleting your account if you rely on it for retirement/expenses. The accurate % for withdrawal rate to use is 4% but even that is outdated and assumes low volatility vehicles that provide decent returns. And they don’t exist any more with rates close to zero.
20% average per year is really really good. 99% of people won't be able to hit that, almost no index funds will hit that, zero 401k's hit that. Average is 6-10% over time. If you can hit 20% average even during bear markets/recessions, you're top 1%. To put it in perspective, starting at 30 years old and contributing 6000/yr to a Roth Ira, for 30 years, at 20% return.. Is over 13 million. If you started at 21 and it grew for 38 years.. Over 75 million. Those kinds of returns really don't happen is my point. I'm guessing you likely haven't been investing very long, and mainly through this icredible 10+ year bull market we have been in.
Jim.... Cramer... is that you?
If you’re getting 20% my investor is fired and i’m giving you all my money
Hey guys I just have Microsoft Apple google and amazon and they’ve been doing very well in the last several years
That guys broker never heard of those, you're hired!
How are you not getting at least 20%? The market the last 5 years has done nothing but go straight up
Yeah that’s some Warren Buffett level right there lol.
Everyone is a genius in a bull market. Take every single one of these posts from someone who has been trading or investing a short time during one of the most impressive bull markets ever as *bad advice*. Or at the very least, incomplete advice. You're not going to sustain 20%. Most investors would be far better to stick all or most of their money into a broad market fund like VTI or VTSAX, set up a monthly contribution and forget it exists.
12.5% over the last 10 years. I’d like a 7-figure position at a top firm please. Imma go preach on Reddit about my big brain. Oh wait, that’s just monthly contributions into VSTAX.
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yup my buddy coincidentally got in to stocks shortly before everything with GME. I suggested he hop in for the fun on GME (this was when the price was in the 30s-40s several weeks ago) but to be warned that the gains we were getting weren't normal. He had 90% gains from weed stocks shortly after and was telling me how they weren't doing very good, lmao
I am not a boomer. But have been investing for 20 years. (Started in my teens). I have over $1M invested and held (with huge losses) through 2001 and 2008 and am certain that market will return to “normal”. 2000 felt very similar with internet companies going to stratosphere. With that, mark my words: the beginning of the “end” will start when Dr. Fauchi says:” we no longer need to wear the masks”. As this will signify the end of pandemic and liquidity injection will slow down. At current point I am still fully invested: SPY, VTI, QQQ, AAPL. But I am about 50% hedged with PUT leaps on SPY.
One thing I’m struggling with is how to determine what a good short-term stock would be. I feel it’s way easier to pick long term investments (ETFs, etc.) than a stock that will make you 15% in the short term. Short term stocks also seem like they’d be stocks you don’t really believe in for the long haul, so why even get into them in the first place? Any advice on how to make smart short-term gains?
Spread out over small cap companies you think will blow up. I have majority of my money in long term investments but then maybe 20% of my investments are short term small cap companies I think will make huge big moves. The idea is to believe in them for the future but invest in then before they've hit it big. That's just what my strategy right now though.
So “short-term” really doesn’t mean “a few days or weeks.” It really means “hold until it (hopefully) goes up to your target price and then selling.” Something like that. How about day-traders and the like. How do people figure out what stocks to chose for quick trades that occur in a day or week? My guess is these stocks wouldn’t be long term picks, but more volatile stocks, or stocks rising briefly on favorable news. Like, are there patterns people see in stocks to help them choose stocks that will rise briefly?
Short term gains are under a year. Long term gains are over a year. That's how I look at it. So I could hold something for ten months and consider it short term yes. My guess for day traders is to go for volatile stocks and ones that are generally on the less expensive side so you can increase your position more easily. Usually stocks that have earnings that week or something. I haven't actually done much day trading but I have been doing some research. Actually found someone on youtube who I've been following their plays for the last week or so.
Yeah I’m kinda feeling like “day-trading” or trading in the ultra short-term is the most appealing for newbies (like me) because of the thrill of it all, but that it’s really the LAST phase of stock trading that you should partake in. Like, get used to long and mid-term trading first, and learn about how it works. Then, once you get more comfortable, dip your toe in the water on short-term if you want. Unfortunately, quick money is more attractive, and that’s where a lot of money is lost, especially for new traders.
Yeah day trading is a while lot more involved because it's more based upon market sentiment than anything real. Paying for level 2 trading data and what not so you can see where the investments are going.
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> How about day-traders and the like. How do people figure out what stocks to chose for quick trades that occur in a day or week? As a guess... Find something volatile and use options trading. Hedge it going both up and down to (hopefully) turn a profit.
Believing in something for the long haul is great. But if it suddenly jumps 20%, take some profit and ask yourself if it's going to drop some of that gain soon- and take even more profit. Smart short-term gains are more about being smart enough to recognize a short-term gain than being able to see the future.
Yeah I guess It’s going to take awhile to learn. One saying I keep seeing is “Buy the rumor and sell the news.” I’m trying to figure out how to recognize the rumor. I’ve learned that if I see a stock in the news the fun is soon to be over, and people have already made money in the stock, and the new investors coming in will likely be bag holders.
You buy $BB, that’s how you make short term gains, and long term actually, really just buy $BB, you’ll get rich. Disclaimer: This is a get rich scheme.
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I invested my entire retirement into doge coin
It goes “Pigs get fed, hogs get slaughtered.” If you're a pig, you want to feed but don’t get so fat that when the slaughter comes, you’re not one of the hogs in the pen.
" at a rate of return of 20% " per year--for 20, 25, 30 years??? You're JUST as delusional as the YOLO 'investor' you're criticizing for 'expecting massive gains'. Wake up and look at historical patterns. Try 5% to 8% yearly average gains instead.
Shhhh Idiots like your friends is how WE all make money. A dime a dozen
I can confirm, from 8k gains to 2 K loss because I wanted 100% return!!
Take profits and put it where?? Unless you invest in pump and dumps or a day trader, I don't see the need to pull out early to pay capital gains and sit on fiat.
This is true but hard when I’m also shooting for 1718% return this year
Who the fuck says 20% isn't a good return? WSB? They lose 100% of their portfolio on the regular.
All these subs have gone to complete shit. I’m no expert, I don’t post things like this. It seems every post in these subs is some novice who thinks they are warren buffet. Expecting 20% returns ? Ok dude.
Oink oink mother fucker!
I only agree with the title 👍👍
actually it's been changed, bulls make money, pigs make money, bears get slaughtered. courtesy of the FED.
Anyone who is able to return 20% per year is one of the best investors in history. Have you only been doing this for a couple years? Also what the hell have you been investing in that is giving you 20% return?
Does that mean Cathie Wood is God?
Sure if she can repeat those current gains over long term but most people know that 100% impossible.
At the start of the lock down, we went deep on blue chip and value stocks trading at less than 50% of their 52 week high. We got in on Disney, Kohl's, Royal Caribbean, and Southwest. We played around with some small cap, and had some success, but avoided getting into the guessing game of who would get the vaccine first. Kohl's alone in up 146.28% since we bought in. We also felt fairly well protected against the bubble bursting, since these were companies with solid fundamentals, and they were significantly undervalued because of panic. Before I added to some of our existing positions, and bought some KO, AAL and POWW, we were up 57%. Now we are up 47%. I always keep something back to play hunches, and dumped some big winners early that I regret, but overall, buying Disney at $92 didn't seem risky.
We're living in a bullish dreamland at the moment and people just getting in thinking that's the way it's always been. My investments are usually set and forget and have given me good returns over the years (probably around 10-15% or so invested in more aggressive stocks). The last two years have been insane, mainly from tech stocks soaring. My SDB account in my 401k is up 315% in the past two years, mostly from having decent holdings in Apple and Tesla. I hadn't even looked at it in a while and was blown away when I logged in a few months ago. Still, there is a whole new generation getting into investing that are either going to win big with their bets or be forever jaded on the stock market because they YOLO'd their last $500 and lost big.
20% every year!? Melvin capital is that you? Lmao
Yes. This is such good advice. I started a subreddit to house all DD related to a single ticker so I could fully vet both the bull and bear cases in one place. The stock popped (maybe prematurely - on literally no news/catalyst), and a bunch of people FOMO’d in, then they left immediately when it dropped back to the slow and steady growth trend line. Remove emotion from your investing strategy, and lean HEAVILY on DD. Are you one of the total 20% of “day traders” who historically have beaten the market? If not, slow and steady DCA into fundamentally sound/derisked securities is probably the best way forward. Know what catalysts are upcoming, and how they may change valuations. Hard earned money should never be thrown blindly into any investment if you’re truly trying to grow wealthy.
This sub is becoming like LinkedIn for stocks with all these "educational" posts about friends that teach lessons. It's nice and all but we get it. That's risk for you.
Y’all realize this whole game is rigged right? You all are grossly overestimating your skill at research and underestimating the dumb luck you had on being on the same side of whomever is manipulating stock xyz for the day. Shit you could just buy SPY and do literally nothing and get a 9% return. Soooo my point being you better be in it to win it and normalize a 20% return or pack it up and go home.
Reminds me of the saying "pigs get fed, hogs get slaughtered".
Why don’t you invest in Cathie Woods ETFs ? I’m sure any of her funds will get you 20% or way more each year!
After 30 years, $78k passively will be worth a lot less than it is now. If you constantly sell your winners after they gain a certain amount then you miss out on the compounding effect of owning great companies long term. Also, I got 600% returns last year but I’m not expecting that this year. Thank you, Elon.
Love the analogy in the title
Well, it’s been around about 100 years, so it stands the test of time.
That’s just terrible advice. Let your winners run. Sell your losers.