I like trading, because I can make a decent living out of it. But although money can come easy through trading after some hard work learning how to trade and planning and executing your trading plans you hear the odd story of how investment is way better than trading actively. There was a stock that in the last three years that would have allowed you to grow an initial $1000 investment into $131,666 or alternatively if you picked the "other stock" you would have earned $107,432 in three years by simply sitting on your hands. No trading plans, no time going in and out of trades as well as analysing them. the two stocks? Uranium explorer Paladin and Fortescue Metals. Rise in price had been fuelled by sheer growth as neither pays dividends.
Its been three years since the Australian sharemarket bottomed out after being spooked by corporate corruption, terrorism and the war in Iraq and where on March 13, 2003, the S&P/ASX 200 stood at just 2700. And look where it stands now - hovering around 4700 (85% increase) yet to hit the 5000 mark.
Next in line is Caltex; with the same investment, would have earned $9818 over three years. (With a yield of only 2.07% - growth accounted for most of the growth in share price). Then you had the choice of owning either Austar United with $9607, energy stock Worley Parsons with $7736 and minerals explorer Jubilee Mines with $6653. The trend of growth lying in the energy and materials sectors. However there was many other stocks in the same sector that were flatliners.
One of the worst choices you could have made was invest $1000 into Flight Centre, reducing $1000 into just $524. Air New Zealand shrunk $1000 to $529. Then come retailer Warehouse Group ($543), and packaging companies Paperlinx ($902) and Amcor ($1009). If you bought Telstra - you would have made $90 over three years considering dividends paid out, but a loss of $127 in share price.
Now the stagnant players with little growth: AMP investors would have $1103, while NAB investors would have $1201. Remember - this is over three years.
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