Throughout my investing journey, I have been through really bad dips and long-term troughs that seem to last forever. For example, despite all those strategies employed, I have made close to 110k paper loss for one counter in my portfolio. That did not feel good because those paper losses amount to months of profits from trading. So, do investors make money? I noticed this “AD” a while back on investing.com (shown below) and I feel it is quite telling when a site that promotes trading tells you the statistics of traders who make net losses in their portfolios/accounts. In this post, I want to make it clear that actually, most investors do not make money, let alone “a lot of money”. Yes, there are the few who can occasionally flaunt their Ace trades making XXXXX% but in reality, their losses might also be huge and potentially larger than the gains they show online. In today’s post, I want to address this issue of dishonesty in general so that the rest of us understand that it is normal to lose money when investing and trading and only those who can take it can invest in the long run.

Investors tend to hide their failures and flaunt their successes

It is easy to imagine that many people who post stuff online are liars. Think about the millions of influencers staging their presence online to portray success and fame before they get their first sponsor or contract. Likewise, there are also liars on social media as they seek to boost their ego and belittle others in the process. Especially in recent months where things that happen on the market generally do not make sense, people are coming from all directions saying how another friend or relative of theirs made a killing from a simple trade. On top of that, we also see how news agencies amplify accidental wins of people investing in this stock or that coin and thus becoming million or billionaires. All in all, such information does not do any good for regular people and investors because it might trigger mindless greed in them which will only lead to stacking losses over time.

Few people actually make big bets for big wins

Even though it is possible to make huge returns from trading high-risk assets, there is an extremely low chance for you to throw vast amounts of your capital relative to your total investment amount. This is because investing requires confidence in the assets that you buy. Therefore it is highly unlikely that anyone is willing to go all-in (like how they expressed themselves online) when they invest in those assets themselves. So the next time when you hear someone flaunt someone else’s success, it is probably a fabrication or a relatively small capital investment (usually around $500 to $1000).

There is no such thing as a win-win scenario in investing

Make no mistake, when there is an extended rally, it only delays the losers from losing but eventually, those losses will be realized. Simply put, the money that went in would have been withdrawn by the seller (after commissions and taxes), this means that no money is created in the entire process. According to Warren Buffett, “Price is what you pay, value is what you get.” That meant that the price of an asset rising means nothing to the actual value of the asset. Hence you have to beware when you sense greed in a particular industry, company, or asset. Often, it will only lead to delayed disappointments and devastating outcomes if you dip your toes in shark-infested waters.

Closing Thoughts

The moral of this post is to remind ourselves to stop being so superficial when looking at other investors’ successes. The logic dictates that big hits become harder to achieve simply because you have already missed those opportunities at a lower price/cost. Instead of aiming for big wins, learn to stay humble and achieve smaller and sustainable returns before chasing for larger yields in each trade. I care about absolute gains more than yields because I choose to be practical and believe that I can’t always be a winner in every situation.