(Hint: Your Compounded Annual Growth Rate would have been: 27.38 %)
Imagine if you had invested $10,000 in the stock market a decade ago. Today, that modest investment could have transformed into a life-changing sum. However this article is not about that. It is about investing over a relatively short duration, picking the right stocks and being comfortable with the risk of the market.
So let us imagine, you are an investing novice with a lot of cash in hand (you know who you are!) and you want to invest your money - But you tell yourself - I don’t know how to read any of those complicated charts, I am going to loose all my money!
You however consume the news on a daily basis and know what is trending (Or you know a person like me who will run his algorithms and figure out where to invest. Just kidding. ). You decide that you will go with a simple **Buy & Hold Strategy.**
( What is Buy & Hold Strategy you ask? Click Here for an article on that. )
So its March 1st 2023, and you decide that you will invest $10,000 in these following 10 US companies:
| Date | Ticker | Company Name | Close Price |
|---|---|---|---|
| March 01, 2023 | AAPL | Apple Inc. | $ 145.31 |
| March 01, 2023 | ABBV | AbbVie Inc. | $ 155.27 |
| March 01, 2023 | ABT | Abbott Laboratories | $ 100.83 |
| March 01, 2023 | ADT | ADT Inc. | $ 7.6 |
| March 01, 2023 | ACN | Accenture plc | $ 263.59 |
| March 01, 2023 | ADBE | Adobe Inc. | $ 323.89 |
| March 01, 2023 | AMD | Advanced Micro Devices, Inc. | $ 78.29 |
| March 01, 2023 | AMZN | Amazon.com, Inc. | $ 92.17 |
| March 01, 2023 | ADSK | Autodesk, Inc. | $ 196.38 |
| March 01, 2023 | ALC | Alcon Inc. | $ 67.96 |
You have access to buying fractional shares, so you decide to put $1000 in each one of these companies. A total investment of $10,000!
You diligently follow the ups and downs of your portfolio for the first month and you see your portfolio go up and down, but then loose interest.
Life and work takes over and you kind of forget about your portfolio.