Seeking advice from people who made it big through investments
Feb 16, 2021
6 Comments
I am seeking advice on trading strategies. I am a noob when it comes to stock market. I did some passive investments till now. Mostly ark etfs, aapl, Msft. I simply don’t know how to strategize trading options.
Any advice on how to get started ?
So far, I have done wheel strategy for options but premium is too less for the capital locked for 3-4 weeks!
Any advice regarding resources, knowledge material is helpful.
#investments #personalfinance
comments
More salient thoughts in 🧵
If you save your money and live beneath your means you will accumulate sufficient savings for a healthy retirement.
Not having a financial budget is bad. Having a strict budget that makes you hate the present for hopes of a heavenly future is worse. A flexible budget that allows you to enjoy the present while saving for the future is ideal.
No one ever made more money by stressing about money. If your excess money is stressing you out, give it away or live in a communist country. If your perceived lack of money is stressing you out, turn that energy towards a side hustle to make money.
More money won't solve your problems. If anything it will amplify your problems.
Decrease your wants in life. The less wants you have, the happier you will be.
I know a man that made $100M and then gave it all to charity. He told me financial security isn't a number, it's a mindset.
Net-worth is not a good measure of success or well-being. I would define wealth has the ability to fulfill your needs (shelter, food, hobbies, entertainment, and charity). Nassim Talib defines true wealth as the following: Worriless sleeping, Clear conscience, Reciprocal gratitude, Absence of envy, Frequent laughs, No meeting rooms, and Periodic surprises.
Aim for simplicity in your investments.
As soon as you make an investment you lose all objectivity. Before buying anything write a note to yourself about why you're buying the asset and when you plan to sell. If the asset begins to fall out of favor, check your note. If your original reason for buying the asset is still valid, hang on.
Investments go through seasons (a time to plant, a time to nurture, a time to harvest, and a time to do nothing). If you lose sight of the seasons and you plant when the season is asking you to harvest, you will find yourself in a world of hurt.
Don't let your money burn a hole into your pocket. If you become greedy enough eventually you'll find great ways to lose your money in poor investments.
Good investing is boring as hell and if it isn't, you're doing something wrong.
Fall in love with a good bowl of ice cream or great bbq, don't fall in love with an investment.
Cash flow isn't only generated by real estate. It can be generated via company dividends. A side hustle. Writing software. Consulting. Etc. Focus on growing cash flow.
Financial planning is a relatively recent development in human society and thousands of generations of humans have done quite fine without an MBA taking 1% of assets under management.
Financial advice is only as good as the provider's inherent conflict of interest. Financial planners will always tell you to put more in stock/index funds because that's how they earn fees. Syndicators will tell you to invest in commercial Re when it's overvalued because they need to pay for their overhead costs.
Financial planners love to extrapolate your investment returns over a smooth 30 year time horizon showing your assets growing at a healthy and steady clip. They trick people into thinking they must deploy their cash at all times so the financial planners can gain their fees. In reality that's never the case. Hence, there will be times to sit on your cash and other times to deploy it. Heaven help you if you retire in the midst of a financial crisis and have to sell off your assets at a 50% discount.
Read books on human psychology and that will grow & protect your wealth more than any guru or high priced newsletter (Speaking of free newsletters :) http://investorstherapy.co )
Early retirement is a great concept that grows in popularity in times of plenty but soon implodes in times of famine. Retiring in your 20s and 30s provides your investments minimal time to compound and you miss out on extended years of compounding due to you mooching off of the success of your investments. Heaven help you if you get sick or want to raise a family.
If your goal in life is to save so you can do something you want to do, odds are you are suffering from grass is always greener disease and avoiding your real problem, you're too afraid to make the tough call to work in a field you enjoy.
If anyone says to you "risk-adjusted" or "efficient frontier," run.
Part of something is better than all of nothing. When you partner with someone share the love, make sure they earn a fair share of the rewards of the partnership so they will move heaven and earth to work with you again.
If you're thinking about taking someone's cash for an investment and the first thing they tell you is how bad the last deal provider was, run. Odds are the investor has the problem, not the deal provider.
Luxury drains your wallet and soul. Before great nations were conquered by invaders, these nations were mentally conquered by luxury. Luxury creates sloth, entitlement, disconnects us from the suffering of the unfortunate, and clouds our judgment with a sense of superiority.
For the love of god & science spread the wealth around. Pay for people's dinners, tip your waiter generously, do something good with your wealth.
Read JL collins simple path to wealth.
Maximize tax advantaged accounts first and then put most of your savings into passive index funds like S&P500 (SPY). Use only a small amount for trading.
If you're young, use modest amounts of non callable leverage. What I mean is if interest rate is low, finance your car and your home. Use the extra cash flow to pump money into the stock market. Do not be in a hurry to pay off these loans early.
I personally only use buy and hold strategy even on the riskiest assets (crypto). The key is to spread risk across multiple stocks / funds. Don't go all in on a meme stock and don't use more than 1-2% of NW on options.
My investment portfolio is currently at 1.3M (I'm 29 5yoe TC 250K)
Simple plan is to
1) realize that stock picking is random and hard to win in the long term
2) index funds with low fees maximize gains for most individuals
3) if you need more risk / more reward use leverage.