The #1 investing strategy across the globe (Featuring Decade Investor)

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A Profit Zone guest post brought to you by Decade Investor A.K.A Kolin. Kolin has built his investment portfolio in public and has accumulated almost 100,000 followers on Twitter who are interested in his financial journey. That is no small accomplishment!

He is a long-term investor who prioritizes index funds and dividend stocks but also likes to generate some extra income through covered calls on the side.

Today he will be revealing the #1 investing strategy that requires minimal work, but yields phenomenal results.

So without further ado, here is Decade Investor.

The #1 investing strategy across the globe

There are many different types of strategies you can follow in the stock market. Day trader, options trader, long-term investor, swing trader & so much more. In today’s post, I’m going to talk about what I believe to be the BEST investing strategy that anyone can follow. 

And what is that strategy? 

DOING NOTHING.

Yes, I’m serious.

I believe the best strategy that anyone can follow is simply doing nothing. Buying something & just doing nothing. Not day trading. Not swing trading. Nothing.

Give me 5 minutes to explain why I believe this (with proof!)

If we look at the 10 days following the 10 worst trading days between 1962 & 2021:

• 70% resulted in positive returns

• 10% resulted in flat returns

• 20% resulted in negative returns 

Look at the image below depicting this data:

The red bars are showing us the 10 worst days in the market. The green bars are showing us the subsequent 10 trading days after. Visually, we can see that 7 out of 10 of those times resulted in the market being UP.

On average (the yellow & blue bars), the 10 days following the worst day results in positive returns. What does this tell us? Selling out of fear after a dip in the market could result in missing out on gains during the recovery.

This also means just do nothing. Secondly, look at this chart: 

If we were to take EVERY trading day from 1962 until 2021, there would be a total of 14,809 days. That is A LOT of days. If you sold out of fear & missed just 10 of the best days in the market, your returns would have been 1.46% less per year than someone who stayed invested the entire time.

Just to put this into perspective, 10 out of 14,809 is the equivalent of missing only 0.07% of days. If you were to miss 50 of the best days, your returns would have been 4.75% less per year than someone who stayed invested the entire time. 

What does history tell us?

Well, trying to time the market & selling out of fear could result in a big underperformance in comparison to someone who just simply buys & does nothing. 

Let’s talk about the behavior behind the “doing nothing” strategy. If you are actively looking at your account every single day (especially in 2022), you may be inclined to sell out of fear. You may allow emotions to cause you to sell. This is not good (if you are a long-term investor).

By sticking to your strategy of buying & doing nothing, you (hopefully) will not feel that desire to sell out of fear. You understand the numbers. You understand the data. You understand that selling out of fear could cause you to UNDERperform someone else who is implementing the same strategy.

If you are truly a buy & do nothing investor, you don’t feel the need to open your account daily. You understand that in the short term, the market could go down. But over the long term, generally speaking, the market will go up.

*This does NOT mean every stock will go up. Just because you buy a stock does not mean it will recover. The data & numbers are in regard to the S&P 500, or the market as a whole. Please keep that in mind*

Finally, I want to prove that this strategy can work. Let’s say you are 25 years old, you’re reading this newsletter & you want to follow this strategy. You plan to retire at age 60. You have $0 invested & you are going to put $500 every month into the market (let’s assume an S&P 500 ETF). Finally, let’s assume an 8% average annual return on your investments. The result?

When you turn 60 you will have over $1,100,000 in your portfolio. 

Now I know what you might be thinking… “I don’t want to wait 35 years”. Great. There are 2 things you can do:

1. Look to get a higher rate of return. This is trying to pick stocks/assets that will OUTperform the S&P 500. The risk here is you could end up actually underperforming the market (like most people do). 

2. Look to make more money (& then invest more). This is finding ways to increase your income so you can add more than $500 every month to your investments. The risk here is that you will get to your goals even faster ;) 

Personally, I deploy $4,000 every single month into (an S&P 500 ETF) which is a buy & do nothing strategy. Only time will tell how well this works in the future, but I document every step of my journey on my social media accounts so you can follow along!

Twitter: @DecadeInvestor

YouTube: Decade Investor

I also go live every single morning on my YouTube channel at 9:25 AM ET to talk all things money & bring the most up-to-date news on the stock market. Fridays are the best days to come join a live stream.If you came from this newsletter, let me know! Final thoughts:

If you are subscribed to this newsletter & reading the information that Alex (Dividend Dominator) puts out in The Profit Zone, you are doing more than most people. I know this market sucks right now but keep stacking assets. These are opportunities in the short term. Harness them while they are still here and take advantage while you can. Thanks for reading & keep stacking those assets!

Your friend,

Decade Investor A.K.A Kolin

For all of The Profit Zone’s paying subscribers, keep an eye out for an exclusive paid post coming this week. If you want access, subscribe below:

Some resources to help you make more money:

• My Full Stock Portfolio - get access to all of my positions and get updates every time I buy or sell.

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