\In general, the stock market and fund investors tend to invest in purpose to get rich involvement on the expected higher return on investment, 10-year return of 20% does not render them satisfactory. However, if you really can generally achieve this level of return has been a truly amazing miracle! The magical effect of compound interest will soon be turned into the super-rich.
compounding effect is very magical indeed. For the calculation of compound interest, a simple algorithm called \For example, you have 1 million investment of the fund earned 20% per year, with 72 divided by 20, 3.6. That is, about 3 and a half years time, your 10 thousand yuan will multiply into 20,000 yuan. And so on, it is estimated if you live long enough, the world's money may have been yours.
However, if talking about a few million of principal and enough patience can make us millionaires, why close to 10 million poor people in rich or less broke more? The problem was \You may think: What a great 20% of it? Not many financial experts say investment stock funds can easily reach this income level? However, the truth can be as easy to envisage in wealth to achieve 20% annual growth? We take a look at the history of it at all times.
some time ago, Morningstar named its United States, \Star Equity Fund Manager Bulusibo test Markowitz (Bruce Berkowitz),\coach. but I was too, he was in the past decade the average annual return of 13.2%. Is it because of the limited investment opportunities in the U.S. market it? Well, we look at another star manager David Herlow (David Herro), his two international stock funds in a decade the average annual return of only 10.1%, respectively, and 8.2%.
had the money to the United States, even the best fund managers take care of cattle, the annual earnings much better than this! That China's situation? China's first open-end funds issued in 2001, now less than 10 years. 20 years, the average annual gain in the Shanghai index is only about 16%. About twice the GDP growth. That is, assuming that investors in the Index was first introduced to hold the index funds so far, net of management fees and other costs, the average annual income of less than 15%.
Readers are not willing to find out the Warren Buffett of the counter-example: he managed an annual average rate of return on assets reached 20%. Buffett is the world's richest man Yeah! Among the global investment management, Buffett is only one person only, in the true sense of the low probability events, otherwise how could he be enshrined in thousands of investors as \By this analysis, would like you to not difficult to understand, to rely on investment banking and wealth is not realistic.
rapid economic development in China for 20 years, thousands of wealthy sprung up, but we do not see which one is the secondary market by a simple stock market wealth and investment success. Simple word, a common feature of their wealth to seize the opportunity to add capital accumulation through industrial operation. Most of the time, prosperity is the need of a stroke, yet it is mostly rely on entrepreneurship or venture capital to small probability events to create great success. The stock market and financial investments of the Fund is only one of these ways is to achieve a small probability event big success, recognizing this, we can set a reasonable expected return on investment and financial management, which is able to achieve its stated financial investment target (a small success) key. If the expectations are too high in order to create wealth for the target stock or fund investment to carry out the operation, the occasion of the frequent chasing sell into corrections, the result is often counterproductive. (Yellow Van)
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