Mistakes In Stock Market

                      LEARN ABOUT AVOIDING MAKING  MISTAKES IN STOCK MARKETS.

1. ADDING PERCENTAGES

      Lets assume that 1st year you loose 50%. And 2nd year you make plus 50%. 

      

      At the end of the 2nd year are your investment the same or less.

      At the end of the 2nd year you will have 75% of your investment.

      For example 1st year you invested $1000.

      At the end of the 1st year you loose 50 %. ---- $500

      At the end of the 2nd year you gain 50% ----    $ 250

      At the end of the 2nd year you have $ 750.

      So you lost $ 250. 

      If you gain 100% at the end of  the 2nd year, you will retreive your initial capital.

      This is the performence of your portpolio over the last 4 years.

•       Year 1 : -10
•        Year 2 :  - 45
•        Year 3 : + 20
•        Year 4 :  + 35
•        Year 5 :  ???

      By how much you need to perform in year 5 in order to retreive your initial capital.

•      Year 1 :  -10% =  900
•       Year 2:  -45    =  495
•       Year 3:  +20   =  594
•       Year 4 :  +35  =  801.9
•       Year 5 :   +25  =  1002.