Now if someone came up to you and told you that they could TRIPLE your money in 8 months, what would you say? Laugh, and tell them “no thank you”, right? I mean A) if they could triple someone’s money wouldn’t they triple their own? and B) if it sounds to good to be true….
Unfortunately, that is how most people think and so they stay forever content with the paltry 1.5% interest at their bank and get really excited about their company’s 401k mutual funds doing 20-25% returns. 25%! That’s like giving money away! – right?
The truth is you can make a huge return on your investment – if you know how. And all I need to tell you about it is 6 easy payments of $19.95…. now seriously, their are those out their that GUARANTEE huge returns in short amount of time without ANY risk and usually want some $$$$ to let you in on the secret. All three of those are warning flags – though it is possible to have low risk, guaranteed returns at lower return levels like 15%, (suddenly that 1.5% savings account not sounding so good?) but that is a different story altogether. We are interested in HUGE returns, right? Now from my own personal experience I have to say that one easy way to make big returns is the stock market. And when i say that i mean STOCK market, not mutual funds. Mutual funds are for lazy investers that what to “diversify” (because they heard that was good) and let someone else manage their money for them. The money manager of course needs to get paid which lowers your returns, but that is really only part of the reason mutual funds do poorly after short term success. Hint: If you are looking at a fund that has had great past growth – realize that most of it’s growing is already over. Which i know is counter intuitive for many people. Again, I digress about things which i will strive to cover later… the real reason we’re all here is for the cold hard facts about how much of a return is possible in the stock market. But first let’s touch on an important point.
Now remember that i said that it’s easy to make money in the market, but that doesn’t mean that it isn’t RISKY. It is “easy” in that intelligence and market awareness play in very little to how well one does in the market. Top finiancial experts are often matched against chimps and the old “throw the dart at the stock listing” trick and the experts usually lose (something to keep in mind when talking with your broker ESPECIALLY if you have lower level broker trainee kinda guy). Now that doesn’t mean you can be stupid and throw your money into a pit never to return, but realize that you don’t have to be a banker or a rocket scientist to do well. Now onto the real world results.
My previous record in the stock market was what i opened this section with: tripling my money or a 300% return on my investment. I did this buy purchasing some undervalued Sprint PCS stock and then selling it 8 months later. Now think about this: people crowding around the 401k graphs talking excitedly about this mutual fund and that one “20%, wow!” and “56% in 3 years, unbelievable!”. Then tring to get me excited…. hmm, 20% per year or 300% in 8 months…
Now you may have noticed that i mentioned my PREVIOUS record and may be wondering what, in fact, has prompted this whole diatribe. Well let’s just say my previous record has been shattered by one of my sleeper stocks. Sleeper stocks are what i call stocks that are lower in price and i believe could have a longer term gain. It is not so much that these stocks are undervalued per say (which is what to look for, for a quick turnaround) but they are CHEAP and could do something it the future… and you don’t mind waiting since you have such a small amount invested in them. Now i must say that this particular sleeper stock responded sooner and to a greater extent than I had anticiapated, but as i said the stock market is lucky – er – easy. My new record for stock market returns is…. 1745%
Now that is before brokers fees and such which pull it down to more like 1300%. But for gross returns i purchased some IPIX stock at $1.23 about a year and a half ago and sold it today for $22.70. Sure makes me wish I had bought more shares. Oh well “hindsight is 20/20” and “you have spend money to make money” and all of those things. The sad thing was that those should each be about 100% higher, but I underestimated the volatility of the stock and decided to shower before calling my broker. Oh well, as they say easy come easy go…