You often see claims in ads about unbelievable returns in the markets. Even though markets have only returned about 5-10% per annum historically, you see claims of 20,30,sometimes 50% per year. (Or if , you read ads like one I saw this morning on a popular investing website, penny stocks ready to explode from $0.5 to $6!!!)
So, what if you were perfect? What if you were like Biff in Back to the Future and you had a time machine to go back and pick all the best performing stocks? How would you do? Our buddy Wes Gray at Empiritrage /Turnkey Analyst takes a look here.
30% per year. Even if you were perfect, with FULL foresight, you would do 30%. And you still would have had a massive, massive drawdown.
Kind of amazing right?
So next time you hear some huckster talking big gains, tell him he better be PERFECT.