Double Your Returns in One Simple Step

By Wayne Mulligan, on Thursday, May 30, 2019

At some point, most investors get fed up with the meager returns offered by stocks.

That’s when they jump into exciting investments like micro-caps or cryptos.

But as I’ll explain today, there’s also a simpler way to boost your returns…

And surprisingly, you won’t even need to make one new investment.

For Bigger Profits, Make Less Investments

Investing a small portion of your portfolio into assets like micro-caps or cryptos is a powerful way to increase your returns.

That’s how Matt and I invest personally, and that’s how we help you invest at Crowdability.

But today we wanted to show you a simpler way to boost your returns.

Simply put, rather than trying to add more “winners” to your portfolio…

Try to weed out the potential “losers” instead.

Let me explain what I mean…

Winners vs. Losers

To make the math easy, let’s make the following assumptions:

  • You make ten investments of $1,000 each.
  • Half the investments will be “winners” and return a profit of 200% each.
  • Half the investments will be “losers” and go to zero.

If you tally up your portfolio’s value in the end, you’ll have $15,000: the five winning investments will turn into $15,000, and the losers will be worth zero.

Since you turned $10,000 into $15,000, your overall returns would be 50%.

Not bad at all.

But now let me show you what happens if you eliminate some of those “losers.”

One Simple Trick Could Double Your Returns

This time, instead of your “losers” dropping by 100% and going to zero, let’s assume they only drop by 50%.

In this new scenario, you’ll end up with a portfolio worth $17,500:

Your five winning investments will turn into $15,000…

And your five “losing” investments will be worth $2,500 ($500 x 5).

Since you turned $10,000 into $17,500, your overall returns would be 75%.

Essentially, by cutting your losses, you boosted your overall returns by 50%.

And if we take this one step further — in other words, if you could eliminate the losers entirely — your overall returns would jump to 100%.

So, simply by weeding out losing trades, you could double your profits.

The Million-Dollar Question

This is a powerful way to increase your returns, while also reducing your risk.

But there’s one thing you’re probably wondering:

How can you avoid making “losing” investments?

Well, unfortunately, you’ll never be able to completely eliminate the risk of making a losing trade. It’s just not realistic.

But over the years, Matt and I have discovered a number of ways to identify — and then to avoid — these profit-killing investments.

And in next Wednesday’s newsletter, Matt will share some of those strategies with you.

More specifically, he’ll share a simple three-step process you can use to eliminate high-risk companies from your portfolio.

So stay tuned!

Best Regards,
Wayne Mulligan

Founder
Crowdability.com

Comments

If you enjoyed this article, subscribe to updates:

Sign-up today and you'll receive our daily insights on early-stage investing, as well as our FREE "Equity Crowdfunding Action Kit" – where you'll learn:

  • The Ins & Outs of Equity Crowdfunding
  • A step-by-step path to get started
  • Tips from dozens of Venture Capitalists
subscribe to updates

Thank you for subscribing!

Tags: Returns Diversification

Share This:
comments powered by Disqus