I want to make a quick buck… thinks everyone

Almost everyone I meet who is new to the investing game asks if there is a way in which a quick buck can be made.
 
As humans, we are all curious to know if there is a better way to 10x your money as quickly as possible. Understandable really, who wouldn’t want that? But we help our clients learn to understand that equities (the stock market) is the only way to invest to make a constant and tidy long-term return. The ‘long-term’ being the crucial bit.
 
However, there is often the temptation - after we’ve gone to great lengths to set up a globally-diversified equity portfolio - to say or insinuate, “yeah, but are you sure there isn’t anything we can do to make a quicker turnaround?”
 
The financially uninformed are tempted to try and make a quick buck through various methods that are effectively just gambling or ‘taking a punt’ on something. This comes with the highest level of associated risk. That risk being total loss of capital. With this risk, of course, comes the potential for high rewards. But to reap those rewards, and certainly to do it consistently, is practically impossible. It’s guess work and even the luckiest of us run out of luck at some point. It is not for mere mortals like you and I.
 
The only people who consistently win from gambling over the long term are the betting companies and bookmakers themselves because they make the rules. But what about the professional gamblers, I hear you ask?
 
Well, Billy Walters, who’s believed to be one of the richest professional gamblers of all time, is said to be worth £200M. Okay, that’s an impressive figure but what is my point here? If you compare this to only the UK’s smallest mainstream betting company, the Kindred Group (who owns Unibet, 32Red, Stan James etc), their revenue alone is £800M.
 
This tells you all you need to know about the real winners of gambling. As my dad always said, “you never see a bookie on a bike”.
 
The same principle applies to trading stocks and options, or any other ‘get rich quick’ scheme that you might’ve found on the internet. Like the shyster who hires out a room in the Shard and promises that his £5,000 trading course will make you a millionaire. Believe me, there’s only one person making money out of that deal. And it ain’t you! The same definitely applies to anyone considering making a big buck out of crypto currency or any other similar fad that hits the headlines.
 
The real winners are always the trading platforms, the online tech company that runs the numbers and the betting apps. They win from you losing AND even take a margin on the few occasions that you do win along the way. It’s a double win for them; double, or worse, loss for you.
 
Financial savvy investors know that a quick buck ain’t something you can come by for any real return. The rare few who pull it off are exceptional.
 
There are very few Cristiano Ronaldo’s that grace this earth; just like there are very few Bill Walters.  
 
Stick to what has always worked folks.


Alfie Mullan, November 2019