Yes, I believe it is, provided that a couple of conditions are met: sufficient capital need to be available (50K should be enough to start), sufficient time (at least 1 year full time if you are lucky) need to be put into the works as there is no shortcut to learn how to make good money trading. Finally a strong determination to succeed no matter what, which means also learn to be patience as patience is absolutely necessary for trading. I am happy I did invest the time, energy and resources.
But most retail investors don't invest that way, you don't just put money in year one and wait 25 years to see what you end up with. If he started work in 1965, and religiously put $xxx into his investment account every month, year after year, by 1985, after 25 years, he should have a nice pot of money. I think dollar cost averaging and dividend reinvestment created a positive return even for that bad period? And if he kept working until 1995 when he reached age 55. He could retire well.
1. Many of us trade because we enjoy the challenge of trading. Making money is just a side benefit. 2. We all believe we are above average and can be the 5%-10% who are consistently profitable. 3. Many traders here don't put all their money or assets into trading. Many, like Handle123, have two pots: One for investing and the other for trading. If you combined the two, many indeed could beat the SP500 year in and year out.
Is it worth spending years on learning how to trade in 2017? I don't think so. People who do it tend to be simply fascinated with the markets, not after the money as the money has dried up. It's much better nowadays to learn programming, become great at it and have a large, stable income rather than staring at squiggly lines for years and more often than not ending up with no results. Do tell me though, how much one needs to rely on S&P returns for income for a decent life? I would say it's 7 figures and how many actually do have that sitting around? This is where trading becomes attractive, pipe dream or not.
Being a trader is an extremely difficult journey, which takes a toll on you financially, emotionally, and socially. Having said that, I know different peoples go through the journey for different reasons: 1) Some of them just don’t want to work. Once they realize trading is hard work, they will soon give up. 2) Some of them think trading is a way to get rich quick. Once they blow up their account, they will give up. 3) Some of them want to consistently take money out of the markets like an ATM. They will achieve their goals until there is a change in the financial market regime or there is a Black Swan event. Some will get wiped out. Some will recalibrate their strategies to the new market environment and continue on with trading. 4) Some of them want to know how to do the extraordinary. They have a burning desire to find out how legendary traders succeed, so they can replicate their success. They also love trading because it is intellectually stimulating to analyze fundamentals, calculate correlations on the trading instruments, their drivers, and their catalysts, perform backtesting on various strategies benchmarking to Gaussian’s, analyze charts of various timeframes, investigate on potential market discrepancies, assess geopolitical condition and government policies, and forming hypothesis on various uncorrelated instruments. They also don’t blindly follow trading rules anymore. They have a strong understanding of the underlying reason for various trading rules and have analyses to back them up. Trading is their life and it is what they are brought on earth to do. So your question on whether or not it is worth it to learn to trade, my personal response is yes! Pension Admin
I agree, but fact is that there was a real risk of failure. I know a few people who lost lots of money in stocks and even in bonds. My example was a bit extreme but could happen in real life. Looking in hindsight it is easy to say if you would have done this or that... because then every investor or daytrader would make a fortune. Reality is completely different. That shows that things are not so easy and that people make a lot of wrong decisions, or no decisions at all.
Yes, I totally agree. Hindsight is always 20/20, my backtests were always profitable but not when I went live. To the OP, yes it is worthwhile if you enjoy the challenge but it is hard work. I work harder now than when I had a real job. Best wishes to you Mtrader.
It depends how you define " worth it". Is is worth it monetarily-- no way- in every way i can think of-- statistically, return , risk of ruin, I could go on and on..... Is it worth it as a intellectual challenge? Yes, it's the best it gets imho in that category. If u need money, start a business. If you have money and like a challenge-- learn to trade.
You're right, retail traders can only hope and dream of beating the SP. Options give retail traders a hedge, but comes with a fairly steep learning curve. It's a stacked game against retail traders without a hedge.