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Long-term Copy vs Short-term Copy

I got an email from eToro last week, asking me to write a post showing the difference between long-term copy vs short-term copy. I'm using my own charts instead of the ones from eToro because, you can see a longer period, you can see the comparison with the $SPX500 and the S&P 500 with dividends reinvested and also because my chart is more beautiful but the accuracy is the same since I use all the data from eToro.

If you have copied me on 16th of March 2016, the day I joined eToro with $10 000, today you would have $16 378. This is an annual cumulative gain of 16.0%. If instead you had invested in the $SPX500 , you would have $14 779 and with dividends $15 706.

Now, let's compare some short-term and long-term scenarios:

I got my first copier in May 2017. If he copied me with $10 000, today he has $19 229, which means he nearly doubled his money during that period.

Now, let's look when I reached a peak in January 2018, if you copied me then, you would have $8 953. It doesn't look that long-term copy works anymore. Actually its because I invested in $BTC and $ETHEREUM early in 2017. They were initially 10% of my portfolio but with the bubble, they grew to be 50% of my portfolio and the bubble burst before I could take all my profits. When I bought Bitcoin, it was at $900, but if you copied me in January 2018, you would have bought it at $19 000 but your exposure would be only 5% and not 25% like mine. So you would lose money, yes, but a little less than me. It also means that when I made money on $AAPL which I first bought at $98, if you copy me today, you will buy it at $200 and will make a smaller profit compared to me. Nevertheless, if you copy me for a long period of time, our results will eventually match.

Now, let's see the scenario if you copied me with $10 000 last week, today you'll have $10 129. It is not bad but over the long-term, you're more likely to make bigger profits. eToro allows me to only see the results of people who copied me over the last 12 months but the results are clear, the longer the copy period, the better the results. The best performance over the last 12 months is 19%(over a period of 8 months).

This is not just about me, eToro has given you the opportunity to copy people who invest in multiple assets classes from equities to forex to cyptocurrencies without any fee. And I'm sure most Popular Investor will tell you that the longer the copy period, the better the results. You should also not forget that in order for a trade to be executed on your account, we should open a trade on our account first. So, when we make money, you also make money and when we lose money, you also lose money. And, therefore, as a popular investor, we are always looking at giving you the best results.

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