Perhaps you have one or even several stocks in your portfolio with a price increase of 1,000%? If not, then you are certainly in the best of company. And sadly I don’t know anyone who has such a great value in their inventory.
It is said that there are so-called “Tenbagger” on every corner. In other words, securities that have increased in price more than ten times during the holding period. However, they are usually very dynamic values.
And more often than not he would have had to come in here at a time when such a fantastic development in his share price was far from anticipated. Unfortunately, the respective favorites of a certain segment only develop over time.
But in my opinion, you don’t necessarily need to bet on speculative stocks to make a 1000% profit. You can also accomplish this feat with regular blue chips. At least if you, as an investor, have some patience.
The time factor is the key
Unfortunately, the belief that one can grow one’s capital very quickly with stocks often still reigns supreme on the stock market. In individual cases this may well be possible. But in my opinion it is the time factor that can achieve the best results in stock investing,
This becomes clear, for example, when you look at the development of our DAX performance index. An investor who invested in the DAX for 30 years at the end of 1991 still achieved an average annual return of 8.0%.
What can this average value tell us about our expected price gain of 1,000%? Very easily. If you own a stock that only offers this 8.0% average annual return, after about 32 years you could read the long-awaited 1,000% price increase on your deposit statement.
But who wants to wait that long for this success? Here it is good to know that the value mentioned above only represents an average. And there are quite a few stocks that have performed significantly better over the years.
Like the stock of our well-known sporting goods manufacturer Adidas (WKN: A1EWWW). This generated a price increase of 1,191% in the last 21 years. And it would have surpassed the 1000% mark after a much shorter holding period.
If you want to achieve price gains of 1000% or more, you don’t necessarily have to engage in hot speculation. As we have seen, this is also possible with shares of large ordinary and internationally renowned companies. But of course you have to have a little patience and, above all, a long investment horizon.
To one or the other this may seem a bit boring. But there are also investors who just want to sit back and watch their stocks rise over the decades. And I will say it quite frankly here that I also belong to some extent to this group.
The article Finding the Right Approach: How a 1,000% Price Win Could Become a Reality! first appeared in The Motley Fool Germany.
Andre Kulpa does not own any of the aforementioned shares. The Motley Fool does not own any of the shares mentioned.
Motley Fool Germany 2022