Of Course There are Shortcuts (Do More)

July 22, 2024

People love to tell other people there are no shortcuts.

On one hand, I kind of get it.

People thinking they can plug in a random internet robot and make 10% a month are in for a very sad surprise.

On the other hand, there are obviously ways to get to your goals faster.

To say otherwise is silly.

For example, if an “expert” says that it will take 40 years to grow a stock portfolio, that’s not necessarily true.

Here’s the comparison.

If you started in 2020 with a small $1,000 account and put $10 each month into VTI (the Vanguard total market superstar), you’d end up with $5,400 today:

That’s definite progress. But it’s slow progress.

However, the experts told me there aren’t any shortcuts, so I guess that’s good enough. Thanks, experts!

Well…

If you instead believed in shortcuts, our example would change. Because you want to go faster, you saved much more. And you decided to trade something that moves much more.

In that case, you could’ve started in 2020 with a $1,000 account, contributed $500 each month, and put it into TQQQ.

Here’s how that would look:

If you started in 2020 and woke up in 2024 using that method, you’d have (gulp)… $423,000.

I can hear the incensed protests now.

Yes, that’s a lot more money contributed. Yes, there was a big drawdown. Yes, leveraged ETFs can be risky.

Yes, yes, yes.

But to say there aren’t any shortcuts is a bold-faced lie.

The crazy shortcut strategy is something anyone can do anytime. It’s not a trick.

It’s a hypothetical way to get somewhere faster.

We’ll look at another shortcut in the next Newsletter.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.