Why Only 10% of 300,000 Stock Investors Made Money In A Sample Poll
Last week I attended a conference designed for the owners of financial investing websites. During the conference, I spoke with a number of owners that have cumulatively trained hundreds of thousands of investors and traders over the last two decades.
What was fascinating is that the 20/80 rule was alive and kicking again. Each owner said that 10% or fewer of all of their customers actually made money trading and or investing. The key characteristic of those 10% and the winners was that they all cut their losses.
Their long-term members stayed and prospered once they understood and implemented a money management system. Once they had established this these traders actually made money with a win percentage of 40%. This makes complete sense to me especially if you use a 5 to 1 reward to risk ratio.
The other interesting fact is that those winning investors prospered no matter what they traded. I spoke with sites that traded options, commodities, stocks, derivatives you name it. It did not matter what they traded as long as they cut their losses and used a favorable reward to risk ratio.
I walked away from the conference with a stronger belief that turnaround Stock Investing is a great mechanism for Value investors that want to make money and finally realize value investing does not mean you have to suffer large drawdowns and pain.
I know the pain value investors go through. Early in my career, I was also one of those stubborn investors who believed I knew more than the market. I was an experienced businessman, I was a CPA I worked with some very prominent value investors. It wasn’t until my early 30s that I realized I had to throw away this persona. I Realized that experience and intelligence and street smarts were no match for the markets. Once you have humility and a good money management system you can create wealth.
If you realize that your current investing approach is not working consider becoming a member of turnaround stock investing.
