Why is it a Mistake to Focus on Returns and Success Rates?

2 years ago
49

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Percentages and Returns
What is your winning percentage?
A winning percentage can be important to focus on. It could be 10%, 20%, 30%, 40%, 50%, 60%, 70%, 80%, 90%, 100%. You have to be practical. You might have a high winning percentage but end up losing due to dangerous money management. There are good money management techniques that you implement.
Risk versus reward. The more risk you are willing to take, the more potential reward you will have. Risk tolerances are different with investments and with people. What may be conservative to one may be radical and high risk to another.
Everybody is a little bit different. What do you want your returns to be? Do you want 20% per week, per month, per quarter, per year? My program is tailored to each individual member. Beginners may start out with a low winning percentage but have it improve as they develop a skill. How much time can you devote to this? If you want good returns that allow for compounding, it will require more effort.
Problem: Numbers can be manipulated to say anything.
Solution: Implement wise and practical money management techniques.
Rate of Return:
Everybody is trying to beat the market, but most are not successful. So we end up dollar-cost averaging or relying on a professional. We can do better than professional money managers, but it involves maturing and developing a skill. Your rate of return will be different than others. It might be better, the same, or worse.
Problem: Focusing only on returns.
Solution: Rates of return can vary greatly and be misleading. Use strategies and techniques that help produce a gradual increase in your equity curve.
You want your equity curve to climb steadily and not look like an EKG.
Conservative Investing:
I teach time-tested and conservative strategies and methods, but they may be radical to beginners or just learning new things. Consistent returns are desired.
Successful investing may not be glamorous or flashy but produces consistent positive results over time.
Things change, and fads come and go.
Investments such as the S&P500, the Dow Jones Industrial Average, and the NASDAQ have been around a long time, and they will likely be around in the future. If they are not, then we have some very serious problems.

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