“Coulda, shoulda, woulda.” is an easy way to reject something without giving it any thought. If I say you could have turned $10k into $1M in the past 10 years with 10 minutes of your time per week, a polite reply might be, “Coulda, shoulda, woulda.” A more likely reply is probably, “That’s complete ….!”
So, let’s start with could have. Was it possible? To start, let’s see what $10k turned into if you did absolutely nothing. You simply bought QQQ, an ETF that follows the Nasdaq, or a leveraged version, TQQQ or TECL.
That’s an interesting result. TECL nearly hit $300k doing absolutely nothing, simply buying Wednesday, January 1, 2014 and selling Friday, December 29, 2023. And note that with TECL you were up to $400k in December, 2021 and it fell to $100k in 2022.
By simply selling in December, 2021, which I recommended doing in several articles, “Are You Ready For The Next Market Crash?”, before Christmas, and on Boxing Day, “Give The Gift Of Financial Security Next Year.”, then you avoided a drop to $100k. Since it’s now roughly $300k, you could have gotten that 3x return on the $400k and voila, you just turned $10k into $1.2M in 10 years by taking action once!
Wow! When I got the idea for the article last night, I had no idea it was going to be that easy to hit $1M. In 2014, I had no idea it was possible. I was still ‘learning’ from others and trying to figure out how to make some money to pay off my debt. By December, 2021, I had mostly given up on listening to others, and had a reasonable idea of what was possible. I was also sure enough of my ideas to write some articles to encourage people to take some action and avoid what might be coming in 2022.
For everyone who read those articles and did nothing, “coulda, shoulda, woulda”. I’ve discovered a lot in the past 2 years, and one of the most important decisions, for me, is to quit listening to anyone else. Yes, some people have good methods that yield incredible returns, but their methods are also much more complicated, require more time, and, most importantly, generally have you holding shares and buying more as the price drops. That’s absolutely not what I want.
I also only recently discovered portfoliovisualizer.com which calculates returns over any time period with re-invested dividends for any investment. That provides exact numbers for returns that could have been achieved. You saw the chart for doing nothing, now let’s see what could have been achieved with 10 minutes per week.
Another critical feature that I finally started using was trendlines on an active chart. I was drawing them in for my articles, but I hadn’t bothered to figure out how to add them onto an active chart and save it. Yeah, call me stupid, but when you’re wandering around a forest blindfolded, it’s difficult to maintain a sense of direction. I am now taking your ‘blindfold’ off and pointing you in the exact direction. All you have to do is put one foot in front of the other, or, more exactly, one click of your fingers after another to start changing how you invest your money.
So, back in time, January, 2014 and a friend tells you he made 53.4% in 2 years with an ETF called QQQ. He tells you that it’s completely safe and simply follows the Nasdaq, holding shares in Apple, Microsoft, Amazon, etc. (current holdings). Holding one ETF versus shares in 50 different companies certainly made a lot of sense. He also shows you the weekly chart and the trendlines he uses.
Your initial comment might be, “Looks like it’s ready to drop. I’d be selling if I were you.” and your friend, to your surprise, agrees with you, but says it’s best to wait and see what happens. So, you wait a few weeks and continue having a look at the chart every Saturday.
Early February, you decide to buy as it’s moving up from a 2 week drop. Your other 2 friends, who are also new to trading, decide to continue waiting. Three weeks later, you’re giving them a hard time for ‘missing the boat’. A few weeks later, they’re ribbing you for being aboard a sinking ship. When the price reverses mid-April, one friend decides to buy and the other says, “No thanks. That’s not for me. I’ll stick with my dividend investments.” When you all get together again for Christmas 2014, the fourth friend is saying, “Yeah, I should have listened and bought some shares.”
The first week of December, it had made a hard run up from the October low and everyone was ready to sell for a 24% return for the year. The friend who proposed the idea agreed to be ready to sell. He also tells you that he bought the leveraged version, TQQQ and was up over 150% for the year, selling in March, buying in April, selling in September and buying in October. Just 3 trades. On Monday, December 8, it gaps lower and they all sell.
In January, with the share price moving around a lot but roughly in the middle of the channel, you decide to ask your friend about this TQQQ. The trendlines seem really useful, so maybe TQQQ was worth a try. Your friend was happy with your interest and happy to help. He recommended using QQQ as the guide for when to buy and sell, since there was decay with TQQQ over time, especially when the price falls over an extended period. The first week of February, QQQ hit 99.75 (TQQQ 3.62) and heads up so you buy TQQQ at 3.70 or QQQ at 100, ready to sell if they head lower.
On Saturday, July 18, your friend gives you a call and says he was planning to sell if it dropped the coming week. He had no idea where the price was headed next, but since he was holding TQQQ, he felt it was best to take the win and wait on the sidelines. If it moved higher, he planned to buy QQQ. If it pulled back to the lower support line, he’d buy TQQQ again. It sounded like a good plan to you, so you both sold at 5.30 (QQQ 113).
When you all got together for Christmas 2015, you had plenty to talk about. You were all very happy to have sold in July at 113 and 5.30, and nervously bought the flash crash in August. Buying QQQ at 86 and selling Monday, Dec. 7 at 115 was a fast 33.7% and a sweet 85% with TQQQ. He had called all his friends in advance and told them he was planning to sell, so they also sold, deciding it was a good idea.
At the New Year party, other friends, who didn’t know about the crash, were saying nothing much happened as the S&P 500 was -0.73% for the year. Some others chimed in that the Nasdaq was up 8.4% for the year. Those who had SPY, which follows the S&P 500, all said, “Shoulda bought the Nasdaq.” Most friends were completely content with their dividend investments.
Here are the results for holding 2 years and doing nothing.
The compounded return for 3 trades in QQQ was 87% for a final balance of $18,741, matching the leveraged trade doing nothing. TQQQ, with 3 trades in 2014 and 2 trades in 2015, is up 579% for a final balance of $67.9k. That’s a big improvement on $18.4k doing nothing.
A lot was learned in 2 short years for them and 10 short minutes for you. Seeing the results with leverage and the trustworthiness of the trendlines, they all decided to trade TQQQ going forward. Which one will you now trade, or are you still content with dividend investments and doing nothing? It’s okay if you are, so long as you understand what the alternative potential is.
The first week of January was welcomed by our 4 friends who had sold December 7. Markets gapped lower and QQQ fell to 94.84 the week of Feb. 8, -17.5% from selling at 115. TQQQ fell 45.9% to 2.81. The all bought the following week when it opened higher at 3.24 (-37.6% from selling Dec. 7).
It moved up hard after buying, then made a set of lower highs and lower lows. Two of the friends had sold around 110 equivalent. The other 2 were still holding. After seeing the above chart, they agreed that if it opens higher next week, buy. If it opens lower and falls, sell. It opened higher and a new uptrend was clear by the end of 2017.
At their Christmas 2016 party, they all agreed it looked safe to keep holding, but would sell at 115, or 5.20 for TQQQ, which was the price they sold at a year ago.
A year later, at their Christmas 2017 party, they all agreed it was a great year. No trades and a steady increase in price. They were up an amazing 256.8% from buying the open Monday, Feb. 15, 2016. Remembering the big gap lower and drop to start 2016, two of the friends decide to sell. The other 2 decide to wait and see.
2018 opened about even and pushed higher, so the 2 that sold bought back in and they all watched in weekly awe as the price went up like a rocket en route to the moon. Needless to say, they were all ready to sell the moment it started its inevitable decent to earth. TQQQ shot up from 11.74 to 15.18 (+29.3%) in 4 weeks, then crashed to 10.10 (-33.5%) in less than 2 weeks. Less than 5 weeks later, it was up 57.2% to 15.88, then down in 4 weeks to 10.56 (-33.5%). From there it started a steady climb, getting back to 15.90 by mid-June. From there, it made a 20% drop, and just like the prior drops, your weekly review had you ready to sell early and avoid the drop.
The bottom was hit Monday, Dec. 24 and it roared up on Boxing Day. You may have waited till the following week to buy at 150 and a year later, up 50% with QQQ, it was clearly time to be ready for a drop. When it broke the upper trendline in February, hit 237.47 the next week and started falling, it was time to sell for a 56.7% gain at 235. Then you wait to see what happens. What happened the following week was covid.
Of course covid didn’t suddenly happen on Monday, February 24, and following the trendlines, you sold the week before without knowing anything that was happening in the news. Making just 4 trades with QQQ since buying in 2014, you now have $44.3k. With no trades you have just $27.7k. That’s a pretty good return on 10 minutes of your time per week. Making 11 trades with TQQQ, your balance in Feb. 2020 is a cool $3.1M. Wow, my guess when I started this was $5M or better in 10 years. It’s now $10k+10min/wk+6yr = $3.1M.
The numbers after that just get silly. The low in March, 2020 was 8.07. If you were ‘quick’, buying at 9.00 and held till November, 2021, you’d now be holding $31M, selling at $90 from a high of 91.68. ….a moment of silence to let that sink in. If you cautiously waited till Monday, April 6 which opened at 11.78 from 10.60 (+11.1%), low 11.59, bought on way up at 12.00, high 13.05, close 12.82 (+20.9%) (+6.8% from buy) and then held till November, 2021 and sold at 90.00, you’d now be holding $23.2M. If you traded once, selling on Sept. 3, 2020 at the open, when it was ‘obvious’ and the safe thing to do, re-bought Sept. 25 when appeared safe, and then held till November, 2021 and sold at 90.00, you’d be holding $33.6M. Clearly, selling to avoid a drop and patiently waiting to buy when it appears safe repeatedly provides stellar returns.
For QQQ, I assumed one held on a bit longer before selling and finally sold Jan. 4, 2022 at 400, coming down from 402. That’s a month and a half after hitting a high of 408.71 on November 22, 2021. I similarly chose to be very slow re-buying after the Oct. 13 low of 254.26, and bought Jan. 10, 2023 at 270.00, sold Aug. 2 at the open (379.26), bought at the open (351.72) Nov. 1 and sold the early drop Dec. 28 at 412.00. Those were very conservative and cautious trades, arguably late with buys and sells, yet the 10 year return with just 7 trades turned $10k into $153k. Compare that to holding for those 10 years, from 2014-2023, which yielded $50,785 (17.65% CAGR). Holding TQQ gave $201,143 (35.01% CAGR). You can easily go back in time and decide for yourself when you would have, or should have, bought and sold.
A few weeks ago, I went back to the start of QQQ in 1999 and, with a weekly view, clicked forward by 2 weeks (the default with investing.com and hitting the arrow button). I asked my dad to tell me when he would buy and sell. It was very interesting. He has absolutely no trading experience, but has been listening to me for the past few months. He also has a firm idea from an old Dale Carnegie course that you should sell if it drops more than 3%. Surprisingly, that got him into trouble several times. I chose to sell with it looking like a possible top, willing to buy back a dollar higher if it moved up. He waited, sold when it fell roughly 3%, I then bought when it was down 5-6% and at the support line, and he didn’t. When it then went back to the price he sold, he struggled with the decision to buy or not and I simply set my sell at breakeven and waited. After a few incidences like that, he clearly understood the power of the trendlines. It was like playing a video game and clicking into the future, 2 weeks at a time, every few seconds and deciding in 10 seconds or less whether to hold, buy or sell. Fantastic practice and 35 years of history to prepare one for making those same decisions now going forward.
TQQQ was a buy at the open on Monday, Jan. 8, 2024 as it gapped higher at 46.41 from 45.98, hit a low of 46.35, a high of 48.89, and closed 48.75 (+6.02% from Friday’s close, +5.1% from the open). It closed Friday, Jan. 12 at 50.34 (+8.5% from your buy price). Now you check the chart every weekend, set your alerts, and get on with your life. After one week, you’re now 100% guaranteed to make a profit, since you will sell if it drops. The only question is, how much profit will it be? Only time will tell.
It’s now maximum length for an email, so I’ll sign off here and start this exercise again from March, 2020 to now. Hope you’re staying warm this weekend!