Do you know or are you a successful investor or speculator?

[NickF]

Hi All,

Are there people who actually earn their living on the share market? I've heard that a lot of rich people invest in share market and/or properties, etc, but I am not sure if this is their only income source.
Or maybe they may have a significant amount in the bank and even if they lose 10% in a year rather than making 10% in a year, may not affect their life style considerably.
My personal knowledge is not very encouraging. I know some people who invest (or rather gamble) on the share market, and with some luck in long term they just about break even. I know about others who attempted to earn a living from the share market and they ended up getting loans and running away because they could not repay their debt. Some others tried day trading and after a few years started looking again for a job.
What kind of return could be expected from the share market? 10% per year, 20%, more? What about a bad year?
I am not talking about the best of traders, but about normal people with normal skills.
On the other hand, from what I read, there are apparently fewer people (even considering the professionals) who can get better returns than what the average of the market.
Are there any traders that obtained consistent returns over 10% for most of the last 10 years?
Based on common sense, I suspect that if the returns in the share market would be consistently greater than the property investment, probably less people would invest in property in the favor of shares. Of course, some people may be very scared about the risks of the share market.
I don't intend to leave my job, which I'm pretty happy with and it offers me a decent level of living, I'm just asking. We have some funds available, sitting in the bank and we consider how to make it work harder for us.

Regards,
Nick

 

[Quaama]

I would also like to hear other opinions on the queries that NickF raised. My comments are from a newbie with no real experience other than what he's seen rather than experienced.

NickF asks, inter alia: "... what kind of return can be expected..." and "Are there any traders that obtained consistent returns over 10% for most of the last 10 years?"

I would say that the kind of return to be expected would, in the normal course of events, be roughly equal to the index return plus dividends (dividend value having regard to your own tax situation). I found burrow's post on this thread https://www.aussiestockforums.com/forums/showthread.php?t=4057 to be of interest regarding indices and their returns. Also, I found http://www.macrobusiness.com.au/2011/06/relying-on-stock-market-averages/ worth reading in this regard.

In terms of traders returns over ten years I can't find much information. If anyone is making real good money they are probably not too keen to share their secrets. There are many mentions of great returns by managed funds over the last year and three years but not much over the longer term. I suspect that if 10+% (after fees) was being returned over 10+ years it would be well known and promoted by such firms.

My thought is that if the average return on the main indices, main indices plus dividends, and managed funds is at (or below) 10% then the average investor is bound to be below that figure. I suspect the median figure would be a lot lower!

Despite the above, I still believe that the share market would still be the best investment over 10-20 years and if you just leave it in the bank then inflation and fees are bound to leave you poorer over the long run. I have the arrogance of a newbie to believe that I can get a share market return above the average (and I'm doing as much reading and testing as I can to maximise my chances of a good return).

Good luck with what you decide to do with your available funds.