Picking shares-being right with only 1 in 4 can still see a healthy return

You do not need to pick winning shares all the time. In fact, you may only pick one winner out of four shares, and you may still see a positive return on your investing.

The reason for this is simple. The losses on your losing shares are limited to the amount you have invested. For example, you spend €1,000 on shares in a company, then the most you can lose is €1,000.

If you pick a winner, on the other hand, there is no limit to the potential increase.

Let me give you an example.

I bought Providence Resources shares in the last 12 months, or thereabouts. They have fallen by 58.94%. My original investment of 5,000 shares at .03 cost me €413.99. They are now worth €170.

Even if my entire investment in Providence was wiped out my losses are limited to my initial investment of €413.99. Even if I bought €3,218 of shares and there was a wipe out I would only lose €3,218.

I also bought 1,000 shares in Frasers Group which cost me €3218.08. They have increased in value by 160.99%. They are now worth €8398.86.

There is nothing to stop these shares increasing by 200% or 300% or 400%. There is no limit.

The same principle applies to all shares, regardless of which ones you buy or how much you invest. Your losses have a floor, but your winners have only the sky as a limit.

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