Big Returns, Big Volatility Tesla has returned almost 1,500%.

[Aarroncikk]

http://onlinetradersforum.com/attachments/tumblr_nbyggqfmdt1tvtougo2_500-png.41881/

http://onlinetradersforum.com/attachments/tumblr_nbyggqfmdt1tvtougo1_400-png.41882/

Big Returns, Big Volatility

Tesla has returned almost 1,500% since the IPO in 2010, compounding at 72% per year. The S&P 500 has returned 85% over the same time, compounding at “just” 13% per year.

[accexstuche]

Today, as Tesla is down 10%, it’s a good reminder that with individual stocks, above average returns comes with above average volatility.

Tesla has had 140 sessions where the stock was down at least 3%, or roughly one out of every seven sessions. For some context. that has only happened on six occasions for the S&P 500 over the same time, or one out of every one hundred and seventy-six days.

[aezvuzfc47]

I hate to be the bearer of bad news, but ‘d argue that achieving these returns is virtually impossible for most investors. As a stock exhibits parabolic rise, a few things happen:

1) It becomes an increasingly large percentage of your overall portfolio.

2) As the size of the position grows larger, you become more sensitive to the huge dollar swings.

3) You expect the meteoric rise to continue indefinitely
​
If you’re investing in a growth company that you think is going to change the world, you very well may achieve out sized returns, but be prepared for out sized volatility..

[adavisvenu]

Tesla has had 140 sessions where the stock was down at least 3%, or roughly one out of every seven sessions. For some context. that has only happened on six occasions for the S&P 500 over the same time, or one out of every one hundred and seventy-six days.