How you could have turned $1,000 into billions of dollars by perfectly trading the S&P 500 in 2014
How you could have turned $1,000 into billions of dollars by perfectly trading the S&P 500 in 2014
WRITTEN BY David Yanofsky@YAN0
The likelihood of picking the best performing stock in the S&P 500 every trading day—248 of them—this year is even smaller than guessing those coin flips. Nonetheless, if you did it in 2014, you could have made yourself a billionaire in just eight and a half months from a $1,000 investment. You would have made more money than most American households make in an entire year in just over two months. By now you’d be the richest person in the world, with at least twice as much money as anyone else on the planet, $179 billion.
To accomplish this feat, you’d have to invest entirely in just one stock every day, and that stock would have to be the largest gainer of the S&P 500 on that day. Each day you’d reinvest all of your money in what you’d thought would be that day’s largest gainer, and you’d have to be right.
Here’s how it would have went:
Of course once you’ve made enough money it would be impossible to put it all into one stock without drastically affecting the stock’s price. Before long, you’d find that there were not enough shares to buy, or that you had purchased an entire company—a situation that we ignored for our analysis. Furthermore, we did not include trading fees nor changes in the composition of the S&P and we assumed that investment in fractional shares was allowed by all companies.
A trader with this kind of unbelievable luck would have made less this year than a similar one last year. In 2013, that trader would have made $263 billion through the second week of December.
Editor's note: Of course, you can achieve this in forex much quicker and with no restrictions - except the ability to withdraw, which is dependant upon the broker (if they are willing to pay out).
