You're Doing It All Wrong

Written By Jason Williams

Updated January 10, 2024

After watching Bitcoin and other cryptocurrencies blow up last year, many people seem to have gotten the wrong idea about investing. They seem to think the only way to make money investing is to find something that’ll shoot up overnight, bank the gains, and then move on to the next flash in the pan.

But they couldn’t be more wrong. And if you’re one of the ones looking for outlandish short-term gains, you’re cutting yourself out of the biggest profits the market has to offer…

Millions vs. Billions

Sure, there’s money to be made in short-term trading. Some people can make millions doing it and retire solely on those profits. But those cases are few and far between. That’s because to be a successful short-term investor, you’ve got to be constantly cued into the market.

You’ve got to spend every waking minute analyzing data, reading news, and researching trends and investments. And you’ve got to do it all the time, since you’re moving into and out of positions so frequently.

Few people have the time or gumption for work like that. Especially people who don’t work on Wall Street for a living.

But there’s great news for all the non-full-time traders out there: The richest investors in the world — the absolute most successful — use a completely different strategy. It’s one that anyone can implement to grow a veritable fortune.

And it can mean the difference between retiring with millions and retiring with billions…

Hills vs. Mountains

Those investors don’t look for short-term trends pushing stocks one way or the other. They look for companies that have the fundamental strength to steadily grow for decades to come.

Warren Buffett has been quoted as saying that his favorite holding period is “forever.” But he drives the point home even further with a lesser-known statement:

Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.

Think about that. Would you be OK with your current investments if the market were to close for a decade, if you weren’t able to sell them for 10 years? Or would you be in a panic to drop those trades you’re hoping will be short-term winners?

It comes down to the difference of preferring mountains over hills. Sure, you can get a nice view from the top of that hill, but if you really want to rise above it all, you want to be on a mountaintop. And long-term investments are the way to get there.

Just to give you an example, let’s look at some of the best investments from the past several years and see how short-term and long-term strategies compare with them…

Peak Profit #1: Facebook

Facebook (NASDAQ: FB) went public back in 2012 around $30 a share. As of the start of this month, six years later, it was up a massive 496% to $176.41.

That means if you’d put $1,000 into Facebook back in 2012, you’d have an investment worth a tiny bit less than $6,000 now. But if you’d been in it for short-term gains, you’d have only made a fraction of the potential profit.

Even if you missed every single down month FB stock has had since its debut, you’d only have booked a $3,700 gain. That’s to say, if you took that same $1,000 and reinvested it at the start of every winning month, you’d have made over $2,000 less than if you’d just held the stock through the ups and downs.

FB M2M

In fact, with Facebook, your biggest monthly gain would have only clocked in at 47%. Now, don’t get me wrong, that’s a great month, but it’s nothing compared to the long-term gain of 496%.

And the numbers just get more and more impressive the longer you hold the stock.

Peak Profit #2: Amazon

Take Amazon.com (NASDAQ: AMZN) for another example. It’s been trading on the stock market since 1997. On a split-adjusted basis, it opened at $1.50.

Now, 21 years later, it’s worth nearly $1,400 per share. That’s a long-term gain of 92,315% as of the first of this month. That’s the kind of profit you read about in books or stories about wildly successful investors. But it’s also the kind of profit a long-term strategy gives you.

If you’d taken $1,000 and put it to work with AMZN back in 1997, you’d be looking at one investment in your portfolio that’s worth a whopping $924,153. That’s more than many people will save over the course of their lives, and a very nice start for an incredibly comfortable retirement.

But say you were interested in the short-term gains with Amazon. There were plenty to be had. In fact, Amazon’s best monthly gain since its IPO was 126%. That’s something to brag about right there. Making a triple-digit gain in a month isn’t too shabby. But when you could have made a quintuple-digit gain just by holding onto your shares from the start, why bother?

AMZN M2M

Seriously. If you only caught the good months with Amazon stock and reinvested that $1,000 every time, you’d have made $20,179. That’s an extra $1,000 a year. Sure, it’s nice to have that extra money, but wouldn’t you rather have the extra $44,000 a year that long-term strategy gave you?

Peak Profit #3: Apple

If those first two examples don’t have you convinced, this one will get you there. Apple (NASDAQ: AAPL) has been one of the best investments of all time since its IPO back in 1980. Over its nearly four decades run, Apple stock returned six-digit profits to investors so far. That’s hundreds of thousands of percent.

Apple is up 584,409% from its split-adjusted IPO price of about $0.03. That means a $1,000 investment would be worth nearly $6 MILLION today. That’s a comfortable retirement. That’s money you can live on and still have some left to leave to your family.

And it all started in 1980 with just $1,000.

AAPL M2M 600

But what if you were a short-term Apple investor? How would you be looking now? Well, you’d have made some money, but not even close to $6 million. If you hit every single good month and none of the bad ones, you could have invested $1,000 at the start of each and cashed out a total gain of nearly $30,000.

I don’t know about you, but I’ll take the $6 million.

Paying for Profit

Hopefully those examples gave you an idea of how much more you’ll make when you invest for the long term. The difference in profit is just astronomical. And I didn’t even calculate the fees you’d have paid for those short-term trades.

Let’s say you had one of the discount online brokers. Up until a few years ago, you were paying around $10 every time you made a trade. That’s dropped to around $5 or $6 now, but it still adds up.

On all three of those long-term trades, you’d have paid one commission each. So, you’d have total profits of $6.775 million. You’d have invested a total of $3,000. And you’d have paid $30 in commissions.

But if you were a short-term trader, not only would you have taken home far less money, but you’d have spent a pretty penny more for the privilege of making less.

Now, you’d still have only invested that $3,000 because you’d be cashing $1,000 out and putting it back in every month on each stock. But you’d have only made $53,000. And you’d have paid total commissions worth between $4,500 and $2,250. That means your actual gains were more like $48,000 to $50,000.

And don’t forget, that’s if you somehow manage to only invest in months where the stocks went up. If you caught some of the losses, too, your portfolio would be looking even more emaciated.

Just Too Easy

The problem with everything I just showed you is that it’s just too easy. There’s no trick. Other than researching companies and looking for strength and long-term opportunities, there’s not much to it.

There’s no timing the market. There’s no algorithm. There’s no artificial intelligence at play here. There’s no breakthrough disruptive technology. It’s just simple research and patience.

And it’s why the investing service I run with my colleague Briton Ryle has been so successful over the lifetime of the service. At The Wealth Advisory, we’re not looking to capture short-term gains.

Sure, we’re happy with them when they come, but our strategy hinges on identifying companies that will bring us steady gains for decades to come and provide income for us to reinvest now and live off when we’re ready to retire.

It’s the same strategy we follow with our own investments. It’s the reason my personal portfolio is up triple digits. It’s the reason The Wealth Advisory has beaten the market every single year it’s been around.

Since founding The Wealth Advisory back in 2008, we’ve outperformed the market by hundreds of percent. We’ve even outperformed leveraged funds that provide double and triple the returns of the stock market.

twa vs etfs

Our investors cashed out massive gains in 2017 like:

  • 90% gains on Boeing Co.
  • 87% gains on Cypress Semiconductor Inc.
  • 80% gains on Invitae Corp.
  • 93% gains on Micron Technology Inc.

And they’re still sitting on growing profits like:

  • 265% gains on the Best American Bank
  • 165% gains on the Best American Restaurant Chain
  • 213% gains from “Internet Royalties”
  • 250% gains from “Backdoor Profits”
  • 200% gains from the Top American Health Care Provider

So, if you’re interested in learning how to really do investing right and win in the stock market, you need to learn about what we do at The Wealth Advisory.

To make it as easy as possible for you to get started making long-term profits, Briton and I have put together a presentation that includes some of our best tips for increasing your profits.

You’ll learn how to find companies that will pay you more income every year for decades to come. We’ll show you how to maximize your profits and minimize your losses from market corrections, taxes, and impatience. And we’ll let you in on some little-known ways to save and earn so you’ve got more to invest in those long-term winners.

So, just click this link to view the presentation we’ve put together. Or, if you prefer to read about our strategy at your leisure, click here and you’ll be directed to a report with all the same information.

The sooner you get started with The Wealth Advisory, the faster those storybook profits will start adding up.

To your lasting wealth,

To your wealth,

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Jason Williams

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After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of Main Street Ventures, a pre-IPO investment newsletter; the founder of Future Giants, a nano cap investing service; and authors The Wealth Advisory income stock newsletter. He is also the managing editor of Wealth Daily. To learn more about Jason, click here.

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