One Pro Trader Tip For Investing In The Stock Market

Are you trying to grow your portfolio and generate monthly income from the stock market? Maybe your just trying to find a safe and profitable way to invest your money.

In today’s economy and investing environment it can be extremely hard to find the best places to invest your hard earned money.

If you’re like me, you spent long hard hours working to earn your money and you definitely don’t want to put it somewhere that you could easily lose it all or if you find a halfway decent investment, have your returns eaten away by high fees and investment costs.

If you’re looking for a better way to invest and have tried trading on your own then I’m sure you know what it feels like to lose sleep at night thinking about your trades. Wondering if your trade is going to be a winner or loser. Or maybe you had a great month of profits only to see the market take them back or have them wiped out by one bad trade.

Then after all of the hard work, time, research, and stress your account is left in the negative or barely break even. Doesn’t that really get under your skin? It’s ridiculous. There has to be a solution.

Here are some of the main traditional ways that you can invest in the market to make money. One, you can implement an asset diversification strategy. Two, you can buy and hold for the long term. Three, you can get a financial adviser and take his or her advice. Four, you could invest in CD’s at the bank. Five, you could control your risk and learn how to invest being delta neutral.

Let’s take a closer look at each one of these investing Strategies.

1. Asset Diversification: Look, I am sure that you heard this one a million times, don’t put all your eggs in one basket. Asset diversification is the idea that if you spread your money around to different asset classes you will limit your risk because if one asset class goes down another will go up and offset your loses. Well, it can work like this but if it does, you basically end up break even or with a small profit or loss because your gains are offset by your losses or vice versa. Then you all also have to think about what happens if all the asset classes drop in value? Well, I think you know the answer to that question and this does happen.

2. Buy and Hold: Buy and hold is probably another one that I am sure that you have heard before. You know the saying “buy and hold for the long term”. This is one really illustrates a complete lack of planning. I mean you only make money when you sell your investment to capture the gains. In investing you should always know your exit strategy and have specific rules that dictate exactly when you will exit a trade. Who wants to wait some vague amount of 5,10,or 30 years before they get their money back anyway. I know that I don’t have that kind of time.

3. Financial Advisor: Now, I don’t want to rag to much on advisers because I used to be one. But with that being said, I know exactly how they operate. To put it simple, they will most likely charge you big fees to implement one of the two investing strategies above. They know that there are better ways to make money in the market but the reality is that they just have to many clients to implement the really profitable strategies for you and will probably just throw your money into some mutual funds and retirement accounts.

4. Bank CD,s: CD’s are absolutely a horrible investment right now. Most people put their money in CD’s because they think that it is safe. Well in today’s economic environment this couldn’t be further from the truth. With interest rates near zero you will be lucky if you can earn a percent or two and with inflation on the rise you are guaranteed to lose money. Not to mention banks these days are dropping like flies.

5. Delta Neutral Investing: Ok, so now that you know what not to do, I have saved this best tip for last. Delta Neutral Investing is also known as having a non-directional bias. Meaning you don’t care if the market moves up or down, you can make money either way. You see most people think that there is only one way to make money from the market, that is, you buy, the market goes up in value, hence you make money. Or, you sell, the market goes down, you make money. This is known as directional trading and this is how the majority of people try to profit from the market. The other way to profit is not by using the direction of the market but by taking advantage of and profiting from Time and Volatility. By putting on delta neutral positions you can exploit time and volatility to your advantage and for quick and massive gains.