Welcome To The Long Wealth Newsletter (August 15th). (est. 4 min read)

In today’s newsletter we will go over:

• Quality > Quantity

• How to make consistent gains in this market

• And much, much, more..

Actionable Tip Of The Day

When it comes to investing its better to pick one quality investment > dozens of okay trades.

Let me give you an example:

Let's compare two scenarios: one with a single quality investment and another with multiple trades.

Scenario 1: Single Quality Investment

Meet Sarah:

• Invests $10,000 in a undervalued company

• Holds for 1 month

• Gets a return of 8%

Result after 1 month.

• Investment value: $21,445

• Net profit: $11,256

Scenario 2: Multiple Trades

Meet Tom:

• Starts with $10,000

• Makes 20 trades per month.

• Average month: 8% (before fees)

• Trading fee: $5 per trade

Result after 10 years:

• Investment value: $20,034

• Total fees paid: $2,000 (trading) + $500 (account fees) = $2,500

• Net profit: $7,534

That also doesn’t count if he loses trades.

Overall, picking one investment to do every month is better than multiple trades every month.

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Deep Dive

When I first started out trading, I used to find a way to trade everyday because that’s what I thought was going to allow me to make more money.

Like think about, the more I do, the more I can make.

But little did I know, that’s the completely wrong approach when it comes to the stock market.

Because the more trades I took, the more risk I put myself at losing money.

I found out that most of the time my one quality investment would outperform me making 30 trades every month.

And it took less time and had less stress involved as well.

So when it doubt, go with quality over quantity. It’s essentially the 80/20 rule.

20% of your actions will get 80% of the results.

In investing, it implies that a small number of key decisions (like choosing one great stock) can have a larger impact than many small decisions (like frequent trading).

Darold Trinh

Long Wealth Newsletter

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