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Doubling money through the stock market is a very achievable goal. Over the long term, stocks tend to generate attractive returns.
How long could it take to double my money with stocks? Let's analyze the numbers.
stock market Returns
stock market returns can vary wildly from year to year. However, over the long term, returns tend to be around 7%-10% annually, on average.
With that in mind, I've created the following table to show how long it could take to double my money at various rates of return within the aforementioned range.
| Annual return | Time needed to double my money |
| 7% | 10.2 years |
| 8% | 9.0 years |
| 9% | 8.0 years |
| 10% | 7.3 years |
It is worth noting that a skilled investor can possibly achieve superior returns. He Fundsmith Equity The fund, for example, has returned around 15% annually (before fees) since its inception in 2010. So here's a look at the timeframes needed to double your money at slightly higher rates of return.
| Annual return | Time needed to double my money. |
| eleven% | 6.6 years |
| 12% | 6.1 years |
| 13% | 5.7 years |
| 14% | 5.3 years |
| fifteen% | 5.0 years |
a short period
These charts illustrate that when investors consistently generate solid returns on their capital, it really doesn't take long to double their money.
We can see from the first table that if I could achieve a 9% annual return on my money, I could double it in just eight years.
Meanwhile, we can see from the second table that if I could earn 12% a year, I could potentially double my capital in just over six years.
That's not much time. For example, if you invested £200,000 today and were able to generate a return of 12% per year, you could have a capital of £400,000 by 2030. If you made additional investments on a regular basis, you could potentially reach £400k even sooner.
Achieve attractive returns
However, to achieve this type of profitability in the stock market it is necessary to make investments. properly.
That means owning a diversified investment portfolio containing at least 15 different stocks (ideally a few more). And these stocks must be from different industries and market areas.
Simply owning a handful of stocks known as PA and Lloyd's It is unlikely to generate the desired returns. This is because individual stocks can sometimes underperform (both stocks have fallen in the last five years).
Instead, investors should own a wide range of high-quality stocks, including some that are internationally traded, such as the iPhone maker. Apple and owner of Google Alphabet (The US market has generated higher returns than the UK market in recent decades.)
Of course, there is still no guarantee that the returns will be attractive. The stock market can be volatile and unpredictable. However, owning a diversified portfolio of high-quality stocks can dramatically improve your chances of generating strong returns.
