From 0 to Porsche 911. The Steps Every Investor Should Follow.
You are not smarter than the rest of the "investors".
Investment is sexy. It's even sexier when you start watching movies about people getting rich overnight.
It is just at that moment when you download the first broker you find on the internet, and you start buying shares of a company your cousin has recommended, and you expect that in a matter of minutes, they will increase in value by 200%. A company that has been trading for 25 years and just at the moment you have bought it is when it is going to increase its share price?
You start to feel that little bug in your body when you earn the first euros "without doing anything". You then decide to invest a little more money from your savings. At that moment, you don't know that you are at the end of the cycle and that in a matter of months or weeks, you will most likely see one of the many ups and downs the market has all the time.
When this happens, you decide to take your savings out of company A and invest in company B, which the day before made +5%.
The cycle repeats itself over and over again while you keep losing money.
On top of that, you have lost the first 5 years as an investor where the market has returned 20% annualized. However, you have achieved 0%, at best.
You've reached a point where you doubt that the stock market is for you, and you decide that you'd better dedicate 12 hours a day to your job in order to get a promotion and earn more money while your money stays in your checking account.
If you're reading this, it probably hasn't happened to you directly. But you probably know many people who have or have had this happen to them.
Even if you think it's not possible, earning enough money to achieve financial independence is possible. It's even possible to earn a lot more to buy a Porsche 911. But rest assured, you will not achieve this if you do not first understand the next three statements:
You are not smarter than everyone else.
Compound, compound, and compound.
Be ambitious when the market is destroyed.
The stock market, unlike the movies, takes a long time to understand until you realize that you will never understand it 100%. There is no secret formula, just a correct understanding of the above two points.
Did you know that 90% of "investors" stop investing in the first recession? It is only 10% that benefit from learning and adopting a posture that allows them to face any other market ups and downs, and not only that but to benefit even more.
At Asymmetric Finance, our sole mission from the day we started is to build a robust and diversified portfolio. To achieve this, it is important to make subscribers understand points 1 and 2.
We have been repeating the same strategy for a long time and have achieved really good returns, but what about the third point?
Why be ambitious when the market is destroyed?
It is obvious that when the price of all assets falls, we are buying the same asset but at a discount, isn't it?
It seems something that is simple to understand, but most investors do not want to understand it. They prefer to see how an asset does not stop rising to buy it than to do precisely the opposite.
We do precisely the opposite. We buy when someone does not want things.
The clearest example is in the real estate sector. What happened during the 2008 crisis? The average price of housing in the US fell by almost 25%, and at the same time, interest rates were lowered to encourage consumption.
In that case, you could ask for a much cheaper fixed rate mortgage, and with the money left over, you could invest in the stock market with a 50% discount.
From 2009 to 2012, the market appreciated (almost) 100%.
Imagine that in addition to taking advantage of the crisis to buy, you can multiply your capital several times while the recession occurs.
This is basically what we propose at Asymmetric Finance. It is just the opposite case of buying in the crisis and is to buy PUTs and CALLs very OTM during periods where they are much cheaper.
This way, in case of a stock market crash, we are able to have much more capital and be able to buy even more assets with more discounts.
Many times a stock market crash is enough to live with for the rest of our lives.
Now our portfolio