Below, I'm going to reveal the two secrets your fund manager and financial advisor don't want you to know. Then I'll show you how they can help you to triple your stock portfolio…
First, consider this.
Peter Lynch was an American money manager at Fidelity Investments between 1977 and 1990. While in control of the Magellan Fund he achieved the best 20-year return of any mutual fund, averaging 29% per annum.
He was so good at his job, that he was able to increase the fund from a measly $18 million to $14 billion in less than 15 years.
Why am I telling you this?
Whilst his record was impeccable, Lynch wasn't right every time. In fact, he conceded: "In this business, if you're good, you're right six times out of ten. You're never going to be right nine times out of ten."
Yes that's right, according to Lynch, you could be wrong 40% of the time and still be good!
It's little wonder why he believed ordinary investors had an advantage over Wall Street analysts.
By investing in what you know Lynch believed people, like you and I, could beat the market with fourth grade mathematics and life experience.
The most obvious secret to growing your wealth
But if you thought my first secret wasn't all too secretive, the second one is even better…
Did you know that since January 1900 the Australian stock market has achieved an average yearly return of 12% per annum?
To put that in perspective, it has turned $1 into $395,000 whilst Australian cash accounts have returned just $214.
The most obvious secret, which fund managers and wealthy people don't want us to know, has been right in front of us this whole time. We only need to look past all the doomsayers and front pages of the financial press to take a long-term view of the market to see what's really happening.
Tripling your money in 10 years
"So how can I triple my money in 10 years?" I hear you say.
The answer: Compounding returns.
By investing $10,000 today and achieving the market's historical average (12% pa) your money will be worth $31,058.
When you consider some companies such as Telstra Corporation Ltd (ASX: TLS) and Coca-Cola Amatil Ltd (ASX: CCL) are expected to pay grossed-up dividend yields more than 6% per annum, you begin to see how easy it could be.
Now, in a more realistic example, let's say you add $500 per month to your stock account and achieve the same return on your original investment.
Your total amount in 10 years will now be $136,351!
Not bad for the market's average…
But if you're sitting back in awe of these numbers, remember it's nothing new and long-term investors have been buying and holding stocks for longer than we've been alive.
Make a MILLION on the ASX
I'm not telling you to go out and buy the first stock you see – probably Commonwealth Bank of Australia (ASX: CBA), Telstra, Coca-Cola Amatil or Woolworths Limited (ASX: WOW) – because you're unlikely to succeed at achieving 12% pa with such an investment strategy.
However, with a few tips and bits of guidance from seasoned, likeminded long-term investors you might triple your money in the next 10 years. For example our top investment advisor, Scott Phillips, has an excellent record of picking market-beating stocks.
