[FREE] 4% - 50% Annual Returns: Investing Strategies 101 – A Masterclass from The Simple Side

What Is “The Simple Side” ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more --------------------------------------------------------------- [[FREE] 4% - 50% Annual Returns: Investing Strategies 101 – A Masterclass from The Simple Side]( [The Simple Side](thesimpleside) Aug 15 ∙ Guest post thesimpleside   [READ IN APP](   What Is “The Simple Side” In the simplest of terms; we are a financial market research company. The Simple Side was created with the belief that providing accurate, non-biased, and simple financial information is more important than filling pages with worthless unexplained jargon for the sake of clicks. We’re the exact opposite of those annoying spam calls — enjoyable, entertaining, and worthwhile. We don’t have ads and we won’t sell you a get-rich-quick scheme either. Our team has been obsessed with business, investing, and economics since day one. We went from selling soda at middle school to sneaker reselling in high school, and now we are investing in real estate, equities, and self-made businesses. [Check out The SImple Side]( Table of Contents - Introduction - The Relationship Between Risk and Return - Overview of Investment Strategies - 4-5% Annual Returns: The Tortoise’s Pace - Bonds: The Quiet Workhorse - U.S. Treasury Bonds - Corporate Bonds - Municipal Bonds - High-Yield Savings Accounts: The Modern Piggy Bank - Online Savings Accounts - Money Market Accounts - Dividend-Paying Stocks: The Best of Both Worlds - Johnson & Johnson (JNJ) - Coca-Cola (KO) - Preferred Stocks: A Middle Ground - 8-10% Annual Returns: The Balanced Approach - Index Funds: The No-Brainer Choice - S&P 500 Index Fund (SPY) - Quote: Warren Buffett on Index Funds - ETFs: Flexibility and Diversification - Vanguard Total Stock Market ETF (VTI) - International ETFs: A World of Opportunity - Mutual Funds: For Those Who Want a Pro in Their Corner - Fidelity Contrafund (FCNTX) - Balanced Funds: A Mix That Works - 15-25% Annual Returns: The Active Investor’s Playground - The Magellan Fund: A Masterclass in High Returns - Peter Lynch and The Magellan Fund - Lynch’s Philosophy: Keep It Simple - Market Dips: Turn Panic into Profit - The 2008 Financial Crisis - Capitalizing on Corrections - Growth Stocks: Betting on the Future - Amazon (AMZN) and Netflix (NFLX) - Small-Cap Growth Stocks: The Wild West - 40-50% Annual Returns: The High-Stakes Game - Beware of the YouTube Gurus: Don’t Get Fooled by Flash - Small-Cap Stocks: Unearthing Tomorrow’s Giants - Monster Beverage (MNST) - Biotech and Tech Startups: High Potential, High Risk - Real-World Example: Investing in Nvidia (NVDA) - Compounding Weekly Gains: The Power of Consistency - 1% Weekly Returns - Case Study: Trading Volatile Stocks - Conclusion - Recap of Investment Strategies - Final Thoughts on Balancing Risk and Reward Investing Strategies That Make 4% to 50% Annual Returns We are going to take a stroll through the world of investing — window shopping investing strategies. Each offers different levels of potential returns and risks. First, we’ll look at safe options that yield 4-5% annually, which are perfect for those who want to sleep well at night. Next, we’ll jump into achieving 8-10% returns — the sweet spot for many investors. I’ll then step it up and we’ll dive into strategies that can yield 15-25% returns. Risks and rewards just keep growing. Finally, we’ll explore the high-risk, high-reward world of 40-50% returns — it’s like the modern-day gold rush. Currently, I (The Simple Side) am trying to be the prospector who finds that gold. Every week I give my paying subscribers a list of stocks that I believe will beat the S&P 500 over the following week. On average I am beating the market by 1.09% a week, 3.27% over 3 weeks, and 56.68% annualized. 4-5% Annual Returns: The Tortoise’s Pace If you’re content with modest but steady returns, aiming for 4-5% annually is like being the tortoise in the famous race. It might not be flashy, but it gets you where you want to go with minimal risk. The following graph shows the returns of bonds (in yellow) and stocks (in red). As you can see, safe and stead returns but much less growth and volatility. Bonds: The Quiet Workhorse Example: U.S. Treasury Bonds Bonds are like the dependable workhorses of the financial world. U.S. Treasury bonds, for instance, have been around for over 200 years and have never missed a payment. You lend the government money, and they pay you interest. It’s as simple as that. A 10-year Treasury bond might yield around 4% today. Sure, it won’t make you rich, but it’s a safe bet, and in investing, that’s worth something. Corporate Bonds: A Bit More Spice If you want a little more kick, corporate bonds can offer slightly higher yields, maybe around 4.5-5%. Companies like Apple or Microsoft are unlikely to default, so their bonds are still pretty safe. You’re getting paid a bit more because there’s a tiny bit more risk compared to government bonds. But remember, tiny risks can grow in unexpected ways, so don’t go overboard. Municipal Bonds: The Tax-Free Option Municipal bonds, or “munis,” are issued by state and local governments and offer returns similar to corporate bonds. The kicker? The interest is often tax-free, which can make that 4-5% yield more attractive, especially if you’re in a higher tax bracket. It’s like getting a little bonus from Uncle Sam for being a good citizen. High-Yield Savings Accounts: The Modern Piggy Bank Example: Online Savings Accounts Back in the day, your grandparents might have tucked their money into a savings account at the local bank. Today, online high-yield savings accounts offer interest rates around 4-5%, which is a lot better than the dusty old 0.01% you’ll get from your neighborhood bank. These accounts are FDIC-insured, so your money is safe, and they’re a great place to park cash if you want it to be accessible without sacrificing too much in returns. Money Market Accounts: A Smidge Higher Money market accounts are like the slightly more ambitious cousins of savings accounts. They invest in short-term, low-risk securities and typically offer interest rates similar to high-yield savings accounts, often around 4-5%. They’re also FDIC-insured, so your principal is protected, making them a secure place to stash your cash while earning a modest return. Dividend-Paying Stocks: The Best of Both Worlds Example: Johnson & Johnson (JNJ), Coca-Cola (KO), or Dividend ETFs (NOBL) The graph above shows the ETF [NOBL 0.00%↑]( which tracks all of the dividend aristocrats. A company will be considered a dividend aristocrat if it raises its dividends consistently for at least the past 25 years. Some aficionados of dividend aristocrats rank them according to additional factors such as company size and liquidity, for instance having a market capitalization in excess of $3 billion. If you like the idea of getting paid regularly while also having a shot at some price appreciation, dividend-paying stocks might be your cup of tea. Companies like Johnson & Johnson and Coca-Cola have been paying reliable dividends for decades, often yielding around 4-5% annually. These companies aren’t likely to double overnight, but they’re also unlikely to go belly-up, making them a solid choice for conservative investors. Preferred Stocks: A Middle Ground Preferred stocks offer higher dividends than common stocks, usually in the 4-6% range. They’re less volatile than common stocks, but you don’t get to vote at shareholder meetings. Think of them as the “steady Eddie” of the stock world—reliable, but not likely to surprise you. In this range, you’re not going to break any speed records, but you’ll likely reach your destination with your portfolio intact. 8-10% Annual Returns: The Balanced Approach If you’re looking for a bit more excitement but still want to keep your feet on the ground, aiming for 8-10% returns is like driving a reliable sedan. It’s not a sports car, but it’s not a clunker either. This is where most investors should aim. Index Funds: The No-Brainer Choice Example: S&P 500 Index Fund (SPY) John Bogle, the founder of Vanguard, once said that the average investor should own the entire market rather than trying to pick individual stocks. Index funds like the S&P 500 Index Fund (SPY) allow you to do just that. The S&P 500 has historically returned about 8-10% annually, and by investing in an index fund, you’re betting on the continued success of the largest 500 companies in the U.S. It’s a bet that has paid off handsomely over the long term. Quote: Warren Buffett on Index Funds Warren Buffett has long been a champion of index funds, stating, “In my view, for most people, the best thing is to own the S&P 500 index fund.” He even bet a group of hedge fund managers that their high-fee strategies couldn’t beat the S&P 500 over a decade—and he won. If it’s good enough for Buffett, it’s probably good enough for most of us. ETFs: Flexibility and Diversification Example: Vanguard Total Stock Market ETF (VTI) Exchange-Traded Funds (ETFs) like the Vanguard Total Stock Market ETF (VTI) give you exposure to the entire U.S. stock market, not just the large caps in the S&P 500. This broader approach can help capture gains from smaller companies that might not be on your radar. It’s like casting a wider net—you might not catch a whale, but you’ll catch a lot of fish. International ETFs: A World of Opportunity If you’re looking to diversify globally, ETFs that track international markets can also yield 8-10% returns. Funds like the Vanguard FTSE All-World ex-US ETF (VEU) spread your risk across multiple economies, which can be a good hedge against U.S.-centric risks. Mutual Funds: For Those Who Want a Pro in Their Corner Example: Fidelity Contrafund (FCNTX) Actively managed mutual funds like the Fidelity Contrafund aim to outperform the market by picking stocks that the fund managers believe will do well. The key is to choose funds with low fees and a long history of solid returns. The Contrafund, for example, has averaged returns around 10% annually over the long term. While fees are higher than index funds, the potential for outperformance exists if you select the right manager. Balanced Funds: A Mix That Works Balanced funds combine stocks and bonds into a single portfolio, aiming to provide a smoother ride with lower volatility than pure equity funds. They’re perfect for those who want growth but also want to cushion the impact of market downturns. A good balanced fund might yield returns in the 8-10% range, making it a solid choice for moderate risk-takers. At this level, you’re getting a nice blend of risk and reward. It’s a strategy that can help you build wealth steadily over time without much thinking or time spent on the process of investing. 15-25% Annual Returns: The Active Investor World When you start aiming for 15-25% returns, you’re no longer playing it safe. This is where you need to put in the work, keep a close eye on your investments, and be willing to ride out the ups and downs. It’s not for everyone, but for those willing to take on more risk, the rewards can be substantial. The Magellan Fund: A Masterclass in High Returns Example: Peter Lynch and The Magellan Fund Above are the recent returns of the Magellan Fund. Even now, the fund is making double-digit returns in just 1 quarter… that is incredible… Plus there is a whole hell of a lot more green in that chart than red. Peter Lynch ran the Magellan Fund from 1977 to 1990, turning it into one of the most successful mutual funds in history. The fund averaged nearly 29% annual returns under his management, thanks to Lynch’s knack for picking winning stocks. His approach was straightforward: invest in what you know, focus on undervalued companies with strong growth potential, and stay patient. He famously said, “Know what you own, and know why you own it.” Lynch’s Philosophy: Keep It Simple Lynch believed that individual investors had an advantage over Wall Street because they could invest in companies they understood. If you shop at a store and love its products, you might know more about its growth potential than an analyst who’s never set foot inside. It’s this kind of simple, common-sense approach that helped Lynch achieve extraordinary returns. Market Dips: Turn Panic into Profit Example: The 2008 Financial Crisis Market downturns are scary, but they also present opportunities for those with the nerve to buy when everyone else is selling. Warren Buffett famously invested in Goldman Sachs and General Electric during the 2008 financial crisis, securing favorable terms and earning substantial returns as the market recovered. His advice? “Be fearful when others are greedy and greedy when others are fearful.” Capitalizing on Corrections When the market corrects—typically a drop of 10-20%—it’s often a good time to buy quality stocks at a discount. If you believe in the long-term prospects of a company, a temporary dip in its stock price can be an opportunity to buy more at a lower price. It’s like buying your favorite brand of jeans on sale—you get the same quality for less money. Growth Stocks: Betting on the Future Example: Amazon (AMZN) and Netflix (NFLX) Investing in growth stocks is about finding companies that are expanding rapidly and reinvesting their profits to fuel further growth. Amazon and Netflix are prime examples. Both companies started as niche players but grew into giants by continually innovating and expanding their offerings. Investors who got in early and held through the volatility saw massive returns, but it wasn’t always a smooth ride. You can see the volatility that both stocks experienced, but when you look at those sweet returns over their lifetimes… it makes it all worth it. Small-Cap Growth Stocks: The Wild West Small-cap growth stocks represent the wild west of investing—full of potential, but also rife with risk. These companies, typically with market capitalizations between $300 million and $2 billion, are often in the early stages of growth and can deliver substantial returns if they succeed. Think of Monster Beverage, which started as a small-cap and grew into a global powerhouse, rewarding early investors handsomely. However, for every success story, many small-cap companies fail, making this an arena for investors with a strong stomach for volatility. To navigate this landscape, it's crucial to thoroughly understand the business, ensure strong management, and assess the financial health and market potential of each company. Small caps can be volatile, with significant price swings, so patience and a long-term perspective are key. While these stocks aren't for everyone, for those willing to take the risk, they offer the possibility of finding the next big winner. If you’re aiming for 15-25% returns, be prepared for a bumpy ride. It’s not for the faint of heart, but with the right strategy and a bit of luck, you could come out ahead. Imagine you had invested in Amazon back in the late 1990s when it was still a small-cap stock with a market capitalization under $2 billion. At the time, Amazon was just an online bookstore, far from the tech giant it is today. Investors who recognized its potential and were willing to weather the volatility saw their investment grow exponentially as Amazon expanded into a global e-commerce and cloud computing leader. However, the road wasn’t smooth—Amazon’s stock price experienced significant ups and downs, and many doubted its ability to succeed. Yet, those who understood the business, believed in Jeff Bezos’s vision, and held on through the rough patches were richly rewarded as the company’s market cap skyrocketed, turning Amazon into one of the most valuable companies in the world. 40-50% Annual Returns: The High-Stakes Game Now we’re entering the realm of high-risk, high-reward investing. Achieving 40-50% returns is possible, but it requires a keen eye for opportunities, a strong stomach for volatility, and a willingness to accept the possibility of significant losses. This is not a game for everyone, but if you play your cards right, the rewards can be life-changing. Beware of the YouTube Gurus: Don’t Get Fooled by Flash In today’s digital age, it’s all too easy to be seduced by online “gurus” who promise to make you rich overnight. They flash their Lamborghinis, expensive watches, and stacks of cash, trying to sell you on their get-rich-quick schemes. Here’s a tip: If someone needs to show you their wealth to convince you of their expertise, run the other way. Many of these so-called experts lure you in with promises of easy money, but they often rely on hype rather than substance. Their strategies are usually high-risk, high-leverage, and often result in more losses than gains for their followers. Remember, if it sounds too good to be true, it probably is. What’s increasingly disappointing is the news coming out about “trusted” gurus. You can find out more about this here: Small-Cap Stocks: Unearthing Tomorrow’s Giants Example: Monster Beverage (MNST) Small-cap stocks can deliver extraordinary returns if you find the right one. Take Monster Beverage, for instance. It started as a small-cap stock, but those who invested early enjoyed annual returns exceeding 50% during its growth phase. The company went from a niche energy drink maker to a global powerhouse, rewarding early investors handsomely. Biotech and Tech Startups: High Potential, High Risk Biotech and tech startups are other fertile grounds for finding small-cap stocks with the potential for massive gains. These companies often operate in cutting-edge fields, offering products or services that could revolutionize industries. However, the failure rate is high, and the road to profitability can be long and uncertain. It’s like panning for gold—most of the time, you’ll find rocks, but occasionally, you’ll strike it rich. Real-World Example: Investing in Nvidia (NVDA) Nvidia, now a giant in the tech industry, started as a small-cap stock in the 1990s. Investors who recognized the company’s potential early on and held through its volatile early years enjoyed astronomical returns. The stock’s rise was driven by its dominance in graphics processing units (GPUs), which have become essential in gaming, data centers, and AI. Nvidia’s story is a reminder that small-cap stocks can grow into industry giants, but you need to be patient and willing to weather the ups and downs. Compounding Weekly Gains: The Power of Consistency Example: 1% Weekly Returns While it may sound modest, achieving a 1% return each week compounds to over 50% annually. This approach involves identifying short-term opportunities—whether through day trading, swing trading, or options trading—and consistently locking in small gains. It’s not glamorous, but it works. Believe it or not, if you just focused on 1% a week, you could become one of the greatest investors of all time. Currently, my weekly picks are doing this and you can see all about it at: [The Simple Side]( [I don't know who won last night's sports game. Hell, I don't know where the remote for the TV is in my house, but I know one thing: markets.]( Case Study: Trading Volatile Stocks Consider a volatile stock like Tesla (TSLA). If you were able to capture just a 1% gain each week by buying on dips and selling on peaks, your annual return would exceed 50%. However, this strategy requires constant monitoring, quick decision-making, and the discipline to take profits regularly. It’s a high-risk, high-reward game that’s not for the faint of heart. Achieving 40-50% returns is possible, but it’s not easy. It requires extensive research, a willingness to take risks, and an acceptance of the possibility of significant losses. But for those who succeed, the rewards can be substantial. Conclusion: Investing is a journey, and the path you choose depends on your goals, risk tolerance, and time horizon. Whether you’re aiming for a conservative 4-5% return or swinging for the fences with 40-50% returns, it’s crucial to understand the risks involved and to invest accordingly. Remember, big returns require big risks, and while the allure of high profits is tempting, it’s essential to have a strategy that aligns with your financial objectives and personal risk tolerance. Whether you’re building a nest egg for retirement, saving for a major purchase, or seeking to grow your wealth aggressively, there’s an investment strategy that can help you achieve your goals. As always, do your homework, stay patient, and don’t let the lure of quick profits lead you astray. In the world of investing, slow and steady often wins the race. But if you’re willing to take calculated risks and put in the effort, the rewards can be life-changing. [Check out The Simple Side]( A guest post by [The Simple Side](thesimpleside?utm_campaign=guest_post_bio&utm_medium=email) I don't know who won last night's sports game. Hell, I don't know where the remote for the TV is in my house, but I know one thing: markets. [Subscribe to The Simple Side]( Join almost 1 Million investors trading with the US Stock Insider and win a Tesla [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2024 Daily Moat, LLC 1111b South Governors Avenue, Dover, DE 19904 US [Unsubscribe]() [Get the app]( writing]()