Big Gains That Look Very Impressive
When we look at some of the top stocks of the last ten years, the numbers look very exciting. Many well-known companies showed very strong growth. Some grew a few hundred percent, while a few rare names grew thousands of percent. A few even touched unbelievable levels that can make anyone feel that buying them long ago would have changed life. These large numbers look very attractive and make it feel like long-term investing is always simple and rewarding.
The Tough Journey Behind These Returns
But the real story is very different. These stocks also saw very deep falls along the way. Some dropped more than 70% at certain times. (see the image below)
These falls were so sharp that most people would have found it very hard to hold them. It is easy to admire the final result, but living through the ups and downs requires a very strong mind. Many investors lose confidence during such big drops and exit before the real upside begins. So the path to big returns is never smooth.
Not Every Company Comes Back
It is also important to remember that only a few companies survive and keep growing. Many others rise for some time, then fall badly, and never recover again. There are many examples of huge companies of the past that looked strong at one time but later lost their position. Their charts show how they climbed up on the right side but collapsed on the left side. This makes it very difficult to know which company will bounce back after a big fall and which one will not.
How Most Gains Come in Short Bursts
If we look at long-term charts, especially of fast-growing companies, we notice something interesting. Most of the gains often come in a very short period. There can be many years where nothing big happens, and the stock moves sideways. Then suddenly, in just a few years, a huge rally comes. If an investor is able to participate in even a part of this strong phase, the returns can be very meaningful.
The key is to avoid getting stuck during long dull periods and to take advantage of the powerful rising phases.
Why a Smart Strategy Matters
This is why having a good plan is important. It helps you stay with winners when they start rising and also guides you to exit when prices begin to fall again. No one can buy exactly at the bottom and sell exactly at the top. But even capturing a portion of the main move can give very strong results. At the same time, avoiding long drawdowns protects your capital and keeps you free to invest in better opportunities. This balance between staying invested during strength and stepping out during weakness is what makes a big difference over time.
Final Thoughts
Big success in the stock market often comes from understanding both the amazing rises and the painful drops. When you learn to handle both, you place yourself in a better position to grow your wealth. The journey is never easy, but with the right mindset and strategy, it becomes much more manageable.
