Day trading challenge wrap up: Did we beat the market?!

Day Trading Challenge Wrap Up 1 Day Trading Challenge Wrap Up 2 Day Trading Challenge Wrap Up 3 Day Trading Challenge Wrap Up 4 Day Trading Challenge Wrap Up 5

If you’ve been following my stories for the past month you know that we’ve been doing a day trading challenge. I took $10,000 of my real money and bought one different stock per day based on a poll in my stories. I put up another $10,000 in an global index fund ETF (VT) and pitted them against each other.

The challenge ended yesterday and guess what: WE BEAT THE MARKET! After a month our day trading fund ended up with $11,291 a gain of 11.3% compared to my index fund which ended up with $10,575 a gain of 5.7%. Not bad!

That means we’re donating all $21,866 to charity! Investing for a month earned us $1,866 we didn’t have before. This wasn’t due to our excellent trading skills (in fact we picked the wrong stock 60% of the time) rather thanks to it being a great month in the market and getting lucky with the 40 stocks we included in the polls. (We got those stock choices from the comments in the original instagram post).

Some other fun facts:

• If we had bought and held all 20 winning stocks for the entire month (instead of just owning a different one each day) we would have ended up with $10,815. About $476 less than our actual total. So we benefitted a bit from the random timing of the days we owned each stock.
• If we had bought and held all 20 stocks that LOST in the polls for 30 days we would have ended up with $11,123, even more. So maybe there’s some value to zigging when everyone else is zagging. More likely it’s just random noise due to small sample sizes and a short period of time.

So does this mean I’m gonna start day trading? No way. I have absolutely no faith this was skill or predictable, rather just getting lucky because we introduced a lot of volatility. If we repeated this experiment 1,000 times I bet we would win slightly less than half and slowly see our gains erode relative to an index.

In fact, there is one reason I actually lost money relative to an index fund in this challenge. Can anyone guess what it is? (Hint: It’s not taxes, I was making these trades inside my Roth IRA).

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.


via Instagram


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Jeremy Circle

Hi, I’m Jeremy! I retired at 36 and currently have a net worth of over $4 million. 

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