You Can't Make Good Returns Safely In The Stock Market
There's a popular saying out there when it comes to generating returns on the stock market.
"High risk. High reward", — which refers to the principle that potential returns rises with an increase in risk.
And in general, that's true — In fact, consistent great returns come as a result of taking as low risk as possible.
Allow me to explain...
The thing is most people view the stock market as a place to gamble on stock codes, instead of a place to invest in real businesses that produce real goods and services. As prudent, long-term investors and traders, your job is to find and filter out great companies that exhibit certain characteristics like high ROE, high ROA, and a track record of generating strong consistent cashflows profitably.
Once you understand this, the next task is to buy these stocks at either a fair or even better, undervalued price. In other words, know what the stock is actually worth. As Warren Buffett says, "Price is what you pay. Value is what you get." — this is referred to as fundamental analysis.
By ensuring you do these 2 things, you dramatically increase your likelihood of success in generating good returns while also reducing your risk. And that's without addressing technical analysis and macro-analysis – 2 extra layers that help you further with this process.
As for what constitutes great returns? The very best on the planet achieve between 15-30% p.a. sustainably.
Of course, there are some private traders who claim to double and triple their money – something that is possible in the short run due to taking leverage, but is not sustainable over long periods.
Check out what our students have had to say below!
"What reassured me when I did Terry's course was the more I looked into it, each layer that I peeled back I realised it just had more and more risk management built into it – this protected you and this protected you and position sizing protected you and Terry just kept going through – Everything was about not losing your money and for a person who’d become risk averse after 20 years of making lots mistakes, I think that’s what grabbed me."
— Chester Cutinha (Job Flow Supervisor)
"I actually made 19% in my first year so I was pretty happy with that. This year I had my super in the market as well and in 6 months I've made 23%, so I'm very happy with that."
— Tricia Butler (I.T. Specialist)
"I had a fabulous track record for the first 6 months of trading – I had 48 sells with no losses at all. So I was ahead of the game 100% – it was quite impressive. Certainly, I was smiling a lot for those 6 months – it was really good."
— Tony Carlisle (Biomedical Engineer)
"I'm currently sitting on 18% Return On Investment, which I'm absolutely stoked with. Considering I've burnt an account in like under 2 years, 10 years ago, it's absolutely amazing. I'm absolutely loving it."
— Paul Tarrant (Energy Markets Trader)
"We've been actively trading with Terry for a little over 2 years now. We're really happy with his system. Our personal portfolio's increased 34% in that period so you can't complain about that. So yeah it's all good!"
— Valerie Kidd (Bookkeeper)
"Next Friday is my 1 year anniversary of share trading. According to IB, since inception I've made like 8% + accumulative return; 12%+ from the start of this year. I'm not in a hurry to buy now. It's not like last year – I thought "I have to be buying" or "I've got to be selling", or "I've got this money and I've got to do somethign with it". Now I'm a lot more laid back and I guess I'm feeling more confident in my own ability."
— Brad Mander (Nurse)
"I’m very happy with 10% written in 2017. This year I am at 20% at what I’m doing. Strike rate probably I would say around 80%. So I’m getting 4 times, nearly 5 times what the banks can do. I’m very comfortable with what Terry is teaching and what Terry is doing."
— Rajesh Mudlapar (Principal Engineer)
"Just using what he had shown me in the seminar, I ended up buying 3 packets of shares as an investor and I ended up selling one of those at a 27% profit in 1 year to pay for the course."
— Andrew Heading-Knight (Musician)
"My ROI for the first year was about 21% and strike rate of about 90%. That was a very pleasing result to get."
— Duy Phan (Construction Manager)
"Got a little portfolio now and I’ve made over 10% on my first four sales and I’ve got a few more there ready - just getting close ready to sell which will be pretty good returns on them. Considering it will take me a year to make 3% off a bank, pretty amazing returns. I could’ve made a lot more, I was a bit keen I bought a bit, didn’t follow the indicators, bought a bit too soon, sold a little bit too late but I still made them returns so it’s very good."
— Terry Cook (Entrepreneur)
"I work so hard to earn and save that money, you actually don’t want to lose it. But now that I’ve started, I’ve made 15% on some of the stocks. When you annualise it, there’s no way you can make that sort of money in a bank, absolutely no way."
— Vicky Ho (Cosmetic Dentist)
"My return’s been quite good but my strike rate has been more important to me because as I said being a longer-term trader and taking all the loses has been soul destroying. My strike rate now is 81% and that’s what I’ve really what I’ve worked hard at – not taking those losses. It’s beautiful, it’s just really really nice for a change."
— Maggie Ward (Entrepreneur)
"My hit rate I'm about 80 percent. ROI is about 15 percent but 15 percent it's doubled the market (index) so, you're doubling the market (index) you're in a very good position. "
— Brenton Ferguson (Electrician)