Advice on how to make 5%/month on $1 million

[qlai]

Let's be clear, the best professional money managers in the world don't make 5% per month returns on a consistent basis.

I don’t think it’s appropriate to compare professional money managers with someone who is running their 401k on the side. Pros can’t afford underperforming even for a quarter , while retail can sit out massive draw downs.

 

[murray t turtle]

You guys did not understand OP well.
1. What he ask is really a 80% annual profit. 1.05^12=1.795
Whether or not he withdraw every month it is no different because both need same level of skill.
2. He ask for every month 5%, not average 5% per month. So you can't have a bad month. Every month must be good. Holding stocks or ETF doesn't make it because they all have bad month.
3. He wants low risk........

%%
I understood him real well\mostly;
actually he does need to withdraw 5% eVery month with his plan. LOL\ cant have a bad month/LOL\that'$ why used an aVerage.
WE used an average because NOBODY has ever got 5%@ month for 10 years or 80% annual for 10 years. Paul Tudor jones beat that; but not for 10 years.Frankly most likely it would make a big [-negative- ]difference if he makes better than average+ then does not ever withdraw anything
I did forget the SEC fees, not every month , but every exit/LOL \sorry,
AND they really tend to rip you off %[negative -negative again- ]when you terminate an account\ use a phone order; use a market or limit order wrongly or too far away from market limit.....................................................................................................................

 

[DiceAreCast]

I think it's you who misunderstood OP. He asks for exactly 60% annual profit. 5% per month with the 5% withdrawn every month. It comes out to a simple return of 60%. Not that this is feasible but that's what the OP asked and stated. So it's you who did not get it.

You guys did not understand OP well.
1. What he ask is really a 80% annual profit. 1.05^12=1.795
Whether or not he withdraw every month it is no different because both need same level of skill.
2. He ask for every month 5%, not average 5% per month. So you can't have a bad month. Every month must be good.Holding stocks or ETF doesn't make it because they all have bad month.
3. He wants low risk. Someone recommend selling naked put, which is high risk.

 

[DiceAreCast]

True but sitting out large drawdown has been a recipe for blowups for many decades now. Cutting losses early is still the only recipe in town to survive long term.

I don’t think it’s appropriate to compare professional money managers with someone who is running their 401k on the side. Pros can’t afford underperforming even for a quarter , while retail can sit out massive draw downs.

 

[qlai]

True but sitting out large drawdown has been a recipe for blowups for many decades now.

That is only true if you've leveraged yourself too much. Obviously, no one likes to be in a drawdown, but for most retail "investors" it's acceptable. So let's say you quit your job and start running the Wheel strategy on high beta stocks to get that nice "steady" income (like in the video I posted, except he is using leverage for repairs). Well, sooner or later the chances are you are going to get stuck with shares on most of your positions and will have no more capital to continue. OK, you've had a good run, time to start looking for a job. What if we never have a prolonged bear market and things bounce relatively quickly? Well, then you are a genius that beat 99% of professionals! Your friends are not asking you for your sharpe

 

[DiceAreCast]

Holding onto losses is a disastrous strategy, whether pro or retail.

That is only true if you've leveraged yourself too much. Obviously, no one likes to be in a drawdown, but for most retail "investors" it's acceptable. So let's say you quit your job and start running the Wheel strategy on high beta stocks to get that nice "steady" income (like in the video I posted, except he is using leverage for repairs). Well, sooner or later the chances are you are going to get stuck with shares on most of your positions and will have no more capital to continue. OK, you've had a good run, time to start looking for a job. What if we never have a prolonged bear market and things bounce relatively quickly? Well, then you are a genius that beat 99% of professionals! Your friends are not asking you for your sharpe

 

[Handle123]

Bet on the red or black in Vegas.

 

[destriero]

Holding onto losses is a disastrous strategy, whether pro or retail.

...or your wife.












































11,000th post!

 

[murray t turtle]

The reality is that no-one is consistently making 10% per month, month after month, with no drawdowns, for any great length of time. If you have 1000 monkeys throw darts at the stock pages you'll end up with a handful who have a run of 3 or 6 or 12 months of good returns. And those are the one's who will show up here bragging about it. And then they quietly go dark....that's when they hit the inevitable drawdown and realize they confused luck with skill. Plus I've noticed that gamblers and punters tend to just plain lie about their returns, they seem to get their own self-worth wrapped into this personal they've built up to the point they can't admit, maybe even to themselves, that they're not as good as they've been saying they are.

Let's be clear, the best professional money managers in the world don't make 5% per month returns on a consistent basis. That's a massive amount of alpha. If you consistently make 1% per month with no drawdowns you're in the top percentiles of the best out there.

%%
Exactly;
except my banker dad said if you pay peanuts /you get monkeys/LOL,
1% a year almost never happens without DD.
REALLY\ i doubt if any number of moneys could make a good return for 12 months.
MOST gamblers do lie+ WSJ has good charts, but they lie about capital markets being a bet!!,!!!!!!
AND it may not be exactly a lie, but i seldom remind new traders to subtract SEC fees or benchmarks have NO slippage,bid/ ask\spread \0% mistakes.....................................
And it may not be exctly a lie, but i noticed the WSJ has some strange time periods on thier charts, most of those make the DOW look Better than SPY/QQQ/LOL.
Something i hate about markets;
DIA has actually done a bit better than SPY/qqq this year; almost never happens that way

 

[Overnight]

Holding onto losses is a disastrous strategy, whether pro or retail.

That depends upon the instrument being held, and the method of the holding.

For example, someone here is holding short on a meme stock and has been holding onto said loss for quite a while. It may never get back his entry point, but he has all the time in the world. It may not be a disastrous end as you suggest, but it could be a painful loss. Just depends on when he chooses to exit.

If I had held onto my index future long "losses" over the past few years of trading I never would have realized a loss, because they all recovered. I am doing that now though, using time as an edge.

We could of course also look at some of the commodity outliers like Lumber...The hell is with that thing! But if you bought that one at it's peak of 1700ish(?), you may suffer forever pain, because it went unusually high and that seems unsustainable.

It really is dependent on the instrument.