Thread by @ProdigalTrader

A reality check on the return of ur capital

Suppose ur portfolio worth 1 Lakh at the time of investment.
You have seen lot of updates on twitter/telegram/fb etc. that many traders comes up with posting 5% up/10% up kind of updates on their timeline everyday.

thread 1//10

You are being a beginner,
just looking for a paltry 1% increase in worth every day for the next 1 year (almost 250 trading days)

2//10

Here comes the reality

Investment = 1 lakh
Interest = 1%
Interval = daily
Time span = 250 days (trading days)
Final amount = 12, 03,215/-
12 Lakh 3 thousand 2 hundred and 15 rupees !!!!!!!!!!!!!
thats 1100% return !!!!!!!!!!!!!

3//10

I hope all of u have got my point.

Now repeat the calculation with just 0.20% increase daily for the next one year
Ur final amount u get would be 164790/-

1 Lakh 64 thousand 7 hundred and 90 rupees.
Or 65% annual return

4//10

Everybody know,
even generating 65% anuual return is very tough.

If ur daily average increase in 0.10%,
u will be making around 30% annual return which would be a far more realistic value.

5//10

In short,
moral of the story is don’t fall prey to this huge jump in a scrips one day price
U may not know,
next day it would fall more than today’s hike,
which of course won’t be updated

6//10

U need to understand that either their stake in that particular stock in very less to make a big impact in their portfolio
or
its not making that kind of return everyday which are conveniently kept away from the public.

7//10

U can check yourself

How many of the peoples u follow updated their daily return % of individual stock on 31st August 2020,
the day we had a mighty fall in the markets??

Psychologically,
we all built up to feel insecured over our failure
and
we try to hide it.

8//10

Frame and build emotional stability from within.
Nurture it from within

Keep it away from outside influence,
especially the seemingly looking super performance from everyone else around u

9//10

Most of the guys in market,
if they look upon themselves,
would fee that he is the sole looser in the market while everyone else is making it huge.

Market is devised in such a way to demoralize and demotivate u to the rock bottom.

Do not fall prey to that.

10/10