How to Triple Your Money in 5 Years

To many people, tripling their money in 5 years is nearly an impossible mission. However, investment experts have something different to say. They think that to triple your investment returns in 5 years can be accomplished, with proper allocation and monitoring, of course. And equity market is the avenue to find the new growth. Despite recent financial crisis, many markets and stocks still manage to to deliver an awesome 200 percent return within the five-year time frames.

How to Triple Your Money in 5 Years?

Risk-Return Trade-Off

If there is an Einstein equation for investment, it has got to be the risk-return trade-off. Tripling your money in such a short period require you to take risks. The higher risks you can take, the more likely you can achieve your ultimate goal. Taking higher risks does not guarantee you higher returns, but for sure, you cannot get higher returns if you are not willing to take higher risks.

Less Diversified

One thing is certain if you want to triple your investment money in 5 years, that is you need to be less diversified. You need to be extremely vigilant in monitoring your investment portfolio. You have to do frequent picking and switching out of the investment based on the market situation.

24.57 Percent Annual Rate of Return

You have to do a lot of trading. 24.57 is the magic number for you. What does that means? In order for you to triple your investment money in 5 years, the annual rate of return has got to be not less than 24.57 percent.

Not Easy for Mutual Funds

It is quite unlikely for mutual funds to achieve that result in 5 years due to their more diversified nature. It is difficult to triple your money using mutual funds as the tool. There are 3 factors you need to fulfil to get the result:

• Right market timing - when you buy in your mutual funds, the market is just about to boom.

• The market interest - the market that the fund is invested receives a surge in interest.

• Fund performance - the fund you invest in is the top performer in its market.

To get all three right is obviously low in possibility.

As a conclusion, if you have the risk appetite and "know-how", you know that the only way to triple your money in 5 years is to invest directly in stocks. This is the only avenue which provides you the "opportunities" to accomplish the mission which many people deem impossible.

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