Using 36 years of historical stock data (1985-2020), we performed 26 years of back-testing on our ThinkingLonger strategy vs. the S&P 500 (1995-2020).
An initial investment be worth $1,931,825 December 2020 - an annualized return of 18.2%
A comparable investment in the S&P 500 would only be worth $341,300 - an annualized return of 10.6%
Every index is a weighted average of stocks – some pull the index up, and some pull it down. Start thinking of the index as a filter and not a benchmark. To beat the market, purchase the Winners that pull it up, and sell the Laggards that pull it down – and do so in a tax-efficient way.
At the beginning of each year, our algorithm analyzes all stocks in an index and identifies the Winners, which have sustained spectacular price performance over the preceding 10 years. Only purchase these Winners.Learn more
At the end of each year, our algorithm re-evaluates all stocks in an index and identifies the Laggards, which are not beating the index by an appreciable amount. Sell these Laggards, and keep the rest.Learn more
After selling the Laggards, reinvest cash proceeds in the newly identified Winners in order to compound your returns over an extended period of time.
Invest through a Traditional IRA, Roth IRA, self-directed 401(k), or any other tax-advantaged investment account to minimize the taxes on your gains, and maximize your returns.Learn more
If you can, further maximize your returns by handling all the stock buy and sell trades yourself. Management fees are a drag on performance.
ThinkingLonger is a publisher and is not a registered investment advisor or a broker-dealer. Most importantly, we are not YOUR investment advisor, and we do not offer personal financial advice. But, we will give you the SEC warning anyway:
Past performance does not necessarily predict future results.
We agree with this statement as to individual stocks. But, our research tells us that there are consistent trends over extended periods of time in aggregates of stocks that can be used to guide investing decisions.