Stock Market Gains Without Stock Market Risk

Sound too good to be true? Think again, think different…

Investors worldwide have most of their investment and retirement capital in the stock market. This means your financial well-being and, therefore your quality of life, ebbs and flows with the rise and fall of the stock market. On the other hand, Wall Street Pros profit whether the market goes up, down or sideways. One group profits, the other group doesn’t… One group gets to live the life they choose, the other doesn’t.

You can enjoy stock market gains with zero stock market risk to your capital, here is how it’s done. Instead of putting your investment capital in the stock market, you can put it in bonds or a bond fund that is high yield, short maturity and very safe. Then, take the interest you generate and use that to buy options on the stock market. Call options go up in value as the market goes up. In the diagram below, that’s exactly what I did.

Lesson from the pros

I used interest from a bond fund, bought call options at demand, where banks are buying, and profited nicely when the market rallied from demand. Poof… Stock market gains with no stock market risk to my capital. There is no stock market risk because your capital isn’t in the stock market. The only risk is if bonds default, but we can keep that very safe. So, when the market goes up you make money, when it goes down your investment capital loses nothing.

Wall Street wraps heavy fees around this, steep surrender charges, long lock up periods and more fees, calls it an annuity and sells it at a premium. Anyone can do this on their own without all that, it’s actually quite simple. Wall Street won’t want me writing about this but I don’t answer to Wall Street…

The key is to stop thinking and acting like a novice investor and start thinking like a Wall Street Pro. Before I got involved in trading and investing, I thought financial professionals were smarter than everyone. When I then worked on that side of the business, what I realized is there aren’t any complicated strategies that the average investor can’t do on their own. Email me with any questions.

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