AI
Friday, November 04, 2011 8:42:43 AM
Singles add up. If there are 250 trading days in the year and you add just 1/10th of one percent in value to your portfolio every day, that annualizes to a 28% return:
(1.001)^250 = 1.283
Not too bad. All you have to do is make a nickle a day on a $50 stock. The catch is, for course, that you have to do it with every cent in your portfolio every day for 250 consecutive trading days. OTOH, if you use margin at 50%, you only have to make 2 1/2 cents a day on a $50 stock, every single day for 250 days. That should be easy enough. Right?
(1.001)^250 = 1.283
Not too bad. All you have to do is make a nickle a day on a $50 stock. The catch is, for course, that you have to do it with every cent in your portfolio every day for 250 consecutive trading days. OTOH, if you use margin at 50%, you only have to make 2 1/2 cents a day on a $50 stock, every single day for 250 days. That should be easy enough. Right?
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