One of the first things to realize about long term buy and hold investing strategies is that the returns are capped. In fact, the most one can realistically hope for in the stock market using this style is somewhere around the 10% mark. Yes, I’m sure someone can show me something that offers higher returns… but I’m talking about long term data backed methods.

⁣⁣The style described above is as opposed to a trading. This involves dipping in and out of the market on a much more short-term basis. When applied to stocks, this has scope to boost returns beyond the 10% figure stated above. However, trading is difficult and time consuming to master therefore not suitable for most. For 99% of people out there it is more suggestable to use tried and tested investing strategies for these reasons.

⁣⁣And when it comes to investing, really the goal for most is to optimise returns. HOWEVER, these returns are ultimately capped by what the market. And realistically that level of return will take decades to give us financial freedom.

⁣⁣The only other was to speed things up is to increase our contributions. And more capital is required to do this… I am of course referring to increasing cashflow.⁣⁣For most dentists this looks like investing in your skills/knowledge OR starting a business. If returns are pretty much capped when investing, then the only other way to increase returns is to increase how much we invest. Of course, I’m not denying that both increasing income AND understanding investing are important; Investing has some huge advantages to it as well which I'll cover in another article. ⁣⁣However, it’s when we give balance to both that we achieve our financial goals in the most efficient fashion.