Direction. Magnitude. Timing.
Jonathan Treussard, Ph.D.
I Help High-Net-Worth Investors Align Their Wealth Seamlessly With Personal Goals & Aspirations ?? | Wealth Management ?? | Ex $150B Global Asset Partner | ?? Economics Ph.D.
→ That's a lot to get right...
This will be short.
On vacation this week as a family.
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OK, here we go...
I was recently interviewed by Business Insider about the latest "sharp tools" for investing:
- Zero-day-to-expiry (0DTE) options
- Levered ETFs
These can do a lot of damage in the WRONG HANDS.
AND I worry that the ratio of WRONG hands to RIGHT hands is VERY HIGH.
WHY?
Because these are sharp tools for DAY TRADERS.
Let that sink in...
Do you know how hard (aka random-luck driven) it is to be a day trader?
→ Try, VERY VERY hard.
↓↓↓
When I started at Santa Monica College in 1999, kids in my classes were day traders.
It was the height of the TECH BUBBLE frenzy.
Making money day trading SEEMED easy.
Until it wasn't.
The next year, those kids had learned a very painful lesson.
→ Making money day trading is ACTUALLY incredibly hard.
Part of the answer as to why that is, is something I learned from my first boss as a professional investor years later.
Investing success comes down to three components:
Direction is baked into investing.
Most investors are "long"
(They gain when the market goes up).
It's limiting, sure, but it makes basic sense.
You're investing based on human progress.
You're investing based on incentives.
→ (The people that run those companies, etc., are paid to make them grow)
You're investing assuming that over time we solve problems and make things better.
The moment you introduce betting on MAGNITUDE and TIMING...
→ The clock is ticking for you to be wrong.
→ The clock is ticking for you to be permanently poorer as a result.
Sadly, that's what a lot of those sharper tools set you up for, if you're unlucky.
You buy a one-day option.
That option could be worth zero in a matter of hours.
Money. Gone.
You lever up 3X.
You could make a lot. But you could lose a lot.
And the hole can become a deep, dark abyss.
↓↓↓
So...
Ask yourself.
Do you need to be right about direction, magnitude, and timing?
If you're like my clients, my guess is you have better things to do than to be a day trader.
- You have important professional and personal responsibilities.
- You have passions and commitments to things you're really passionate about.
Worrying about whether you'll be PERFECTLY right about today's market move seems like a lot of noise to carry around in your head.
↓↓↓
Ok, with that, I'm going to go enjoy my family.
Chat soon,
Jonathan ??
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Disclaimer: Treussard Capital Management LLC is a registered investment advisor. This content is for informational and educational purposes only and does not constitute financial advice in any way. Investing involves risks, including the potential loss of principal. There are no guarantees of investment success or returns. Please consult with a qualified financial advisor before making any investment decisions. For more information and full disclaimers, visit our website https://www.treussard.com/disclosures-and-disclaimers
Helping Investors & Businesses Mitigate Risk, Avoid Fraud, and Make Confident Decisions | Due Diligence Expert | Founder of Aegis RSI
1 周Awesome newsletter Jonathan! I feel like I get smarter about finance every time I read it.