Learning how to multiply your wealth in the stock market is a vital skill that anyone should learn. A normal investor would be able to return around 10% on their investment per year every year. We are not normal investors, we are going to massively increase our ROI and go from $1000 to $10000 in a short time.
The shortest time frame you can expect to 10x an investment in a perfect scenario is around 5 years if you’re new and 2 years if you’re a pro. This is if you stick to mid cap growth companies in emerging sectors. When done properly you can expect massive returns that can easily 10x an investment in a couple years.
This is not going to be easy however. If you don’t know the proper skills on how to evaluate and pick companies you should start by learning how to do fundamental analysis. Here is an article that I wrote on how to do that, check it out if you’re interested.
Without further ado, let’s jump into how you can turn $1,000 into $10,000 in the stock market.
Why are we Sticking to Mid-Cap Growth Stocks?
In order to make a decent ROI (30-45%) every year we need to stick to mid-cap growth stocks. This is because these mid-cap growth stocks typically don’t get the coverage of the large stocks like Apple or Google.
Because of this they can sometimes lead to price differences between the underlying stock’s value and what the price of the stock on the market should be. If that was confusing just understand that mid-cap growth stocks are the place to be if you want to explode a portfolio upwards.
For example, here is a company called Aspen Aerogels.
Back in June/July of 2021 ASPN was considered a mid-cap company. Rumor was that ASPN had successfully adapted one of its products to protect against thermal build up in Electric Vehicle Batteries. This was a major breakthrough in the EV sector.
We covered ASPN in July of 2021 indicating a buy rating on this mad cap company. Since then ASPN returned 21% and looks to keep going.
This was possible because the hordes of analysts that typically cover the large stocks such as Microsoft, Amazon, Google, and Apple had not gotten around to looking at ASPN.
Returns like 21% in 1.2 months are why we stick with mid-cap companies to hit our target ROI.
The $1,000 to $10,000 process
Starting out I will always follow these three steps to achieve massive returns.
Picking the Stock
So we have $1,000 and want to make our way to turn it into $10,000. We are going to have to look for some mid-cap companies that have a massive amount of growth associated with them.
To find this growth we need to look at 3 things. First, is their business model. Is the company’s business model able to be scaled up with little capital expenditure?
Second, does their product or service solve a major issue? Good businesses introduce products and services that directly solve an ongoing issue. For ASPN in the above chart they introduced a way to extend EV battery life.
Third, does the company have the finances to be able to accomplish this? A company can promise whatever it wants but if it does not have the capital to build or deploy their service it’s worthless.
Here are a couple companies that fit all three of the criteria.
Identify your Timeline on ROI
Whether you are only going to be investing for a day or a year, this step is pivotal to succeeding. You absolutely need to identify how long you are going to be in an investment for.
This is because by identifying your investment timeline you are going to be forcing yourself to be patient and look for things that will cause your ROI goal to come true.
For example, if you say I think that “X” stock is going to shoot up in value by “Y” time then you have your timeline.
The most successful investors/traders I know invest off time, not ROI. Before they even open a position they will know how long they plan on staying in an investment. If you follow this then you will see your yearly ROI shoot through the roof as this is what separates the amateur investor/trader from the professional.
If you stick to mid-cap growth stocks and identify a timeline for your investment then chances are you will be seeing double digit returns on a monthly basis. It takes time and patience but stick to your timeline and you will be rewarded.
Hedge Your Investment
Hedging your investment is a secret weapon that all professional investors/traders will do so that their downside is limited.
Hedging is best defined as simply taking out another investment that will gain in price should your first investment fail. If done properly then if your first investment falls in price then your second investment will increase in price.
Here is a nice chart demonstrating this.
As we can see by hedging you are protecting your overall account balance. This in itself will separate you from the amateur investors. To find a good hedge for your investment you simply need to ask yourself “what will increase in price should my first investment fail?”
Whatever the answer to that question is, that is your hedge. A normal hedge would be in the range of 3-5% of your total investment amount. It does not need to be much to keep your portfolio afloat.
How Long Until $10,000?
This depends on how successful you were at picking a stock but to see a 10x return will take you between 2-4 years on your first attempt. If you have done this before successfully that number will be significantly less.
Most professional investors/traders who have taken on the challenge of turning $1,000 into $10,000 have successfully completed the goal in around 1.3-1.5 years. That is an insane ROI that typically involves advanced trading strategies such as arbitrage trading or private equity. I would not engage in these strategies on your first attempt as you will more then likely either lose your entire portfolio or worse, end up owing your broker/bank money.
For most investors looking to enter into the world of professional investing/trading you should start with picking good mid-cap growth companies and then work your way into advanced trading strategies. By sticking to the mid-cap growth strategy you will limit your risk while pursing massive gains.
Further, these gains will compound over time. By performing this strategy consistently and sticking to the three steps you will see your portfolio increase at an exponential rate over time.
The secret to turning $1,000 into $10,000 in the stock market is to stick to mid-cap growth companies and invest smartly. Follow the steps that I have outlined and before you know it you will be a professional investor who can obtain those 10x returns easily.
Here at Chronohistoria I put up stock tips and research so that you can more easily obtain insane ROI’s such as 50-70% per annum. If you want to stay on top of these articles then you should subscribe to the free newsletter.
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Until next time, I wish you the best of luck in your investing journey.