If a trader makes 100–200% returns in a year, then why is Warren Buffet the best investor in the world???????????????????
Since many years and the start of the internet scams and scammers have been creative and taking advantage of lack of financial education and weak mindset of people. We all struggle in life and seek for the lottery. It is this lottery mindset that we can turn rich in a day that fuels our unconscious. We only read and see what we wanna see. And if someone claims to be able to double or triple your money in one year, our eyes and attention immediately shifts towards it.
To be clear, there are people out there, skilled people, people that DO NOT NEED YOUR MONEY, that can turn 100$ into 200$, maybe 1000$ into 2000$, but the money follows and obeys to laws, such as gravity. You can jump maybe 1–2m high with proper training, but no way you can jump 20m high. High yield is negatively correlated to high money. This means the higher account size the lower the yield curve, THIS IS FACT!!! A proven reality!!!
Being great at investing means compounding lots of capital over long periods of time. To make millions you need to invest billions!
Let’s look at the best and most successful, skilled, smart, intelligent investors with years of experience. I am not talking about the the Forex newbie that just started or the internet scammers showing off high results that can’t be found anywhere or do not provide any long term track-record. Here are the top of the top from this real world we all live in, not in the Getrichquickdreamland.
The time span above starts above 10 years (an average of the first 10 years). Warren Buffet has the longest track record from the above chart, with 12% percent excess returns over the S&P. Only Buffet delivers longterm consistency with concentrated holdings.
The chart shows the EXCESS returns and therefore consider Buffets performance around 25% and compound it for 55 years, you will be very rich indeed, multiplying your original capital 200,000x times over.
More studies simply show that the average Investor does not outperform the S&P. Greed, the need to get rich quick, lack of patience, to much risk appetite and a wrong mindset with lack of financial education .
“Greatness in investing is consistency. Anything else is a flash in the pan.”
Trading of course is different from investing in stocks, but the same rules apply to money, demand and supply, redistribution of wealth, market liquidity, leverage. There is not a story about a trader that doubled his account for 10–20years. I am not arguing that some might do it, but it is very unlikely do achieve it in a growing account, and those who are able to do it, THEY DO NOT NEED YOUR MONEY! This is the main message here!
Higher Equity and less effective leverage increase your odds for higher returns. On the other way using high effective leverage with high positions will lead to higher losses and less consistent profits over time.
Use the tools you have! I use dollar cost averaging and compound growth in my advantage, not against me! Get your Home Budget sorted out, Forex or Investing, requires capital. http://bit.ly/50-30-20home_budgeting_rule
Figure out your financial freedom amount with the 4% rule. http://bit.ly/4per_cent_rule
If you are a trader get your risk and money management in track and do not risk more then 1% per position. Risk management is not how much you are willing to lose, that’s risk ability, risk management is managing your risk to avoid blowing your account and be able to trade another day. http://bit.ly/CLmoneymanagement