hebel. today · 7 November 202632 / 74

Money · Investing

Growth stocks survive market crashes through long-term holding

Growth investors often see their holdings drop by more than 50% during market corrections, yet these declines do not signal that a business is broken. Nvidia lost two-thirds of its value between late 2021…

Growth investors often see their holdings drop by more than 50% during market corrections, yet these declines do not signal that a business is broken (Grow or Die). Nvidia lost two-thirds of its value between late 2021 and October 2022, yet the stock eventually reached 14 times its 2020 purchase price for those who maintained their positions. While automated stop-loss orders trigger sales during brief market dips, these automated exits often force investors out of winning positions before long-term compounding begins (Grow or Die). Professional investors like Chris Wood maintain their holdings through midterm election volatility, viewing crashes as the necessary price of admission for owning high-growth businesses.

  • Hedge fund consensus portfolios tracked by GVIP earned 15.0% annually over ten years, performing similarly to the S&P 500 while carrying 25% more risk (The Pareto Investor).
  • Trader Ferg found that his positions sized at 4% or more of his portfolio generated 159% returns, while his small starter positions under 1.5% lost money (Trader Ferg).
  • Bitcoin historical data shows that peak-to-trough drawdowns reached 90%, making it difficult for investors to hold the asset through periods of extreme volatility (rj's trading for dickheads).
  • Daphna built a $4,800 monthly income stream by performing nine checks on potential ETFs, focusing on expense ratios and beta to avoid high advisor fees (Daphna • Let’s Get Rich Together).

Try today · 10 min

Perform a five-minute evaluation on your largest ETF holding.

Check the expense ratio and the fund's beta relative to the S&P 500.

You need

  • The ticker symbol of your primary ETF
  • Access to a financial data site like Yahoo Finance or the fund's official prospectus

Steps

  1. Find the fund's expense ratio to see how much you pay annually in fees.
  2. Identify the fund's beta to understand its volatility relative to the broader market.
  3. Compare these figures against a low-cost S&P 500 index fund.
  4. Check the top ten holdings to ensure they align with your long-term conviction.
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Sources

  1. Grow or DieThis analysis tracks Nvidia's multi-year performance to show how growth stocks recover from 50% drawdowns when held through volatility.

  2. The Pareto InvestorTen years of performance data shows that copying hedge fund consensus portfolios provides no reliable alpha over the S&P 500.

  3. Trader FergA review of 57 trades demonstrates that concentrating capital in high-conviction positions yields significantly better returns than small, speculative bets.

  4. rj's trading for dickheadsThis article details the extreme drawdowns of bitcoin and why position sizing is essential for managing such volatile assets.

  5. Daphna • Let’s Get Rich TogetherThe author provides a nine-step checklist for evaluating ETFs to replace reliance on financial advisors and high-fee products.

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