As you are starting out on your investment journey you need to focus very keenly on compounding over a long period. An example as follows with rough rule of thumb numbers - if you can aim for a 12% compounded return annually that means your money will double very 6 years or so. That means over 30 years you will get 5 doubles. That means R1m, goes to R2m (First double), to R4m (2nd double) to R8m (3rd double) to R16m (4th double), to R32m(5th double) - so R1m goes to R32m after 30 years at 12%. If you can increase your compound rate to =-14,4% you can expect 6 doubles over 30 years, so your 6th double takes you to R64m. Now reflecting this back to Market Capitalisation a R1bn market cap would go to R64bn market cap over 30 years. A R10bn market cap would go R64bn market cap and a R100bn market cap R6400bn market cap over the 30 year period. So it is worth considering whether the type of business you are investing in has the ability to support that size market cap. As an example Apple on its very large market cap may struggle to compound at 15% odd percent over the next 30 years the size may end up being too big, unless they of course diversify into other areas like cars etc. Compounding is very very powerful and only requires a small but consistent return over many years. Time is almost more important that the % return you get each year. If you already knew this apologies for wasting your time. Last point a 2% investment fee each year out of your 14,4% compounded return is massive and that is why you are probably better off either investing in index tracker or selecting a few great companies or both to hedge yourself from yourself.
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