Marathon to wealth

Discussion in 'Trading' started by Lights, Apr 29, 2007.

  1. I have concluded the best compounded return to generate superior wealth longterm is to buy:


    cost average every month over 15-20 years sliding scale as markets rise, invests less vs previous month, if markets drop, invests more vs. previous month up to min/max monthly contribution values.. It will beat 90% of all mutual funds/hedge funds over 10 years and have a statistical risk edge over trading your own strategy.

    This assumes no redemptions for 20 years and assume reinvest of all dividends.

    Assume an initial investment of $100k with 10k contribution per month, you will have $10MM in 20 years.

    Up that to $1,000,000 initial and 100k contribution per month, you would have $100,000,000.
  2. wtf?
  3. Show us the actual backtested mthly #s - I'm too lazy to figure it out myself.
  4. Great WOW numbers......

    Is this based on some back-tested results?

    There is a Value Cost Averaging Strategy that does something similar but this involves getting out of investments when market is at NHs.

    How much do you pull back if the market is down?

    How much to you add if the market is up?

    Please share details, and without it, it becomes a 'great strategy deployed' by a money manager that we cannot duplicate.

    An excel file of some sort would be just fantastic.


  5. It's very simple. It assumes that buying a market index will beat majority of managers and picking individual stocks. based on avg annual return in market, add compounding interest over 20 years and a method to cost average based on month over month trend in market. All dividends reinvested.

    The most powerful force in the universe is compound interest.

  6. LOL...DIA how anti-climatic

    but yea DIA is a great investment though

    Safe and stable with solid returns
  7. Or a CAGR of about 12%. Not much of a gain for your
    "cost average." As another poster pointed out, what
    you have here is a variation of Edelson's Value Averaging.
    Only not a very efficient variation. There are some
    interesting spreadsheets on value averaging at gummy-
    stuff dot org. The versions there will do better than
    yours. If you are going to martingale it, at least use
    a good one.

    As a side note, Bill Gates allegedly uses value averaging
    for his own investments.

    Also, Edelson wrote a book on it. Probably available
    used on Amazon for a less than $10. Worth it if the
    reading of it increases your terminal wealth another

    Glad to hear you can afford to sock away $10k per
    month at your age. That's rare discipline in an 18
    year old.
  8. hehhehehehe
  9. Pekelo


    Except if the market pulls a 1968-1984
  10. with a CAGR of 12%, u have $100MM after 20 years with an initial contribution of $1MM and $100k per month. It thoroughly defeats your strategy of buying YM puts.

    #10     May 2, 2007