A little investment secret.

Here's a little way to invest and build money quickly in the US stockmarket by setting up a systematic Investment program for trading. Since trading involves risk, you need to pick a small return that is easily attainable, but a small return does not produce large gains, unless it can be made over a relatively small period of time. For example, if you make a return of 3% a year, that is a very small amount of money. However a 3% return per month can produce a large return over a year--24%, while a 3% return each week is a whopping annual return of 156%!

On a $1 stock, it only needs to move .03 (3 cents) to make a 3% return. A $2 stock .06, and a $3 needs to move only .09. to make a 3% return.

Set up an offshore trust in an offshore location such as the British Virgin Islands.

Then set up an offshore company owned by the offshore trust.

Transfer money to the offshore company by 'buying its services or its product'---but what you are really doing is investing a set amount each week into the offshore business.

The offshore business gives you power of attorney to trade its account which you place in an online brokerage firm where you can trade with zero commission. With the POA you are the point of contact for the company in the US, and as long as the offshore company does not have a location in the US, then it can trade without capital gains tax.

So, let's say you are investing on a weekly basis with a 3% target. Each week you would invest into the portfolio a set amount, for example, $100, which would go into the brokerage account you manage through the POA. Then you place the entire account into one position, with a limit order to sell after a 3% move. Let's say you buy a stock at 1.55. It would need to move a little over 4 1/2 cents to make 3%. So let's say you decide to sell at a 5 cent move so you put a good-till-canceled order to sell at 1.60. On a typical day in a bull market, in a stock that is trending up and is not too overbought, that should be a very easy trade to complete. In fact there is a good chance it would trade that day or the next.

Once it sells, you don't do anything for the rest of the week until you put the next $100 into the account the following week.

This is not a sure thing, trading involves risk and every time you open a position you are taking on risk. By the end of the year you will have made somewhere around 52 trades. You will have likely taken a loss on some of those trades, and you may have even taken on a position that gapped down while you were holding it, which could certainly take out a chunk of your portfolio. In a bear market or a correction you may decide not to trade, but one possible trade would be in a short ETF---an exchange traded fund that shorts the market so that it goes up as the market goes down. Another possibility would be put options.

Certainly to do this sucessfully I would suggest being very familiar with charts, and know how to use stock screeners. If your portfolio become large, you would probably want to focus on companies with larger institutional holdings, or at the very least, trade at high volume, so that you can quickly buy and sell in a single trade without moving the market.

Using the offshore company allows you to avoid capital gain taxes, but you could certainly do well in your own account, without an offshore entity, and just pay the taxes, especially if you have losing trades to offset the gains.

 

Pretty much been there, done that, got out B4 the tech meltdown. Learned my lesson, never went back.

I'm always amazed how many investors are on these forums!

Want a good investment? Buy the Hipforums! It's for sale, time to retire.

 

Shares and stocks have never interested me. I know this is going to sound stupid but we have always had enough money to live on and do what we want so have never considered playing the stock market. We are happy with things as they are. No thoughts of what would I do if I had x amount of $ or £ or Euros.

 

As you may recall, I was a stock market professional for many years, including as an analyst. I am also a Chartered Market Technician. I though I'd never stop trading. But when I left to write philosophy, that kind of took over. For many years I hardly looked at the market. Today I have too many other things going on to devote the time I once did to trading.

I actually predicted the tech meltdown, and told people when the bottom hit. I told everyone to get out at the beginning of 2008, just a few points from the top. And to get back in at the bottom in 2009. I predicted the crash of the Tokyo market in 1990. And Elaine Garzarelli (who was famous for predicting the 1987 crash the day before), was on a analysts call the previous Friday when I said that I did not like the New York and was expecting it to fall I can not say that this remark influenced her or was the reason for her call, but I was a star analyst at the time, and was the only one that shared a bearish sentiment on that call). I called every major market turn in the market I was in from about 1986 till I retired in 2012. And most corrections. I did this by combining market psychology, charts, and the fact that I am a contrarian---so the more bullish everyone becomes the closer we are to a top----and there is a definite peak of bullishness right at the top that lasts for a week or two or three until the market turns. There is also a definite 1 day panic on the very bottom. I could assess the market psychology just by watching or listening to CNBC for an hour or two right around the opening. (Anyone who tallks bad about CNBC does not know how valuable it is in this regard---I'm not talking about taking their advice or believing what they do---rather assessing--from a contrarian context--how bullish or bearish they are.)

And while I say all that, I will also insist that no one knows what tomorrow will bring. Anything can happen.

But I don't have time for all that stuff anymore. I'd rather go to bed at 4:00 am and wake up around noon, then get up early every weekday to place trades or watch my positions.

Every trade is a risk, and the longer you are in that position the more risk you take. The strategy I described in this thread would involve 52 trades a year (or technically, depending on how you use the word trade,104 trades because each one is a buy and sell.) Since you are just grabbing a 3% return, you are in and out.

But many people would think it is boring. You put $100 into an account and make a quick $3 and do nothing more for that week. Then you put in another $100, and after a quick trade you have $209.09 Then the next week you put in another $100 and you have 318.36. This is a compounded growth rate. So when I said the 3%/week is an annual 156%, the actual return you are making is much higher because it is compounded (to the extent you are able to put every last penny into the trade each week.) If it was just a straight return, you would only have 103, 206, 309, etc at the end of each week. You could see how it grows with this formula (a + 100) x 1.03, where a represents the amount you had at the end of the previous week.

By the end of the year (52 weeks) you would have invested $5,200, but you would have a target of $12,845.40. These numbers are actually a target because again, you are taking on risk, and so forth, but you could be well above that amount or under it. Again, my example assumes trading online so you have a very nominal to no commission and using an offshore entity so that you do not have capital gains taxes. And again, you should also be getting a money market yield on the funds while you are not trading.

Now compound growth is a pretty magic thing, because by the end of the 2nd year your target value would be $72,277.26. By the end of the 3rd year you are at $348,797.26 and 36 weeks into the 4th year you would break $1,000,000. People have a hard time believing this because for every 100 you are only making 3 each week. But for every 1000 that is 30/week, every 10,000, 300/week, 100,000 , 3,000/week, etc.The bigger the portfolio becomes you also have to be a bit more selective of what stock you are buying into. If you buy 300,000 of a thinly traded stock, you are going to push the price up, and when you sell it will push the priced down, so the bigger it becomes the more you are limited to high volume stocks that are heavily traded by institutions.

And no one does this, because who wants to trade for just 3% return? A perfect example is ZVIA. Last month it popped up on one of my stock screeners as it moved above $1. I jumped in and made a quick 3%. This week or last week it made it to about 3.50. I traded it several times over the month getting 3%, even as much as 5% another week. But if I were to brag to someone about that who also bought it when I did, they would laugh at me, because they made 250% at the peak, but they probably did not sell it then, and now it is around 3. But I would bet money that at the end of the year, my portfolio far outpaced theirs.

We are heading towards a bear market though. Which means that you will not have as many candidates of stocks to give you a quick 3%. But you do have them----yesterday as the dow dropped 1000 points, UPRO jumped 8%. This is an ETF that shorts the market so as the market goes down, it goes up. It is a triple short so, in simple terms, it uses leverage to multiply this investment.

You have to know how to use stock screeners to filter out potential candidates, and then know how to read charts to assess which of the candidates is the most likely to give you a quick 3%. This takes me about 1/2 an hour at most each week, and then I'm in and out. I could care less what the company does. or the financials of the company, or whether it is a good company or bad company. It doesn't matter. This also protects you from some of the biggest pitfalls of investing---becoming attached to the stock, and getting greedy on a trade.

 

My dad acted the lazy content commoner. Couldn't have cared less if anybody had any tomorrows, utterly sympathetic for and concerned with his own maximum comfort.

Hence, if his descendency ever does represent and build anything for their children, it won't be because of horny lord lazy and how pleased he was with his self. We don't remember our ancestors for how small world and self content they were.

I think young people should consider setting aside a little something, to play a little hand with Investments. Most gentlemen do and some of them end up on a pepsi-cola or virgin records? So many people say "it was right place, right time?" I have no mind for it, I can only buy big solid rigs, not really gamble the high yield, but what if you had bought $100 of pot stock 5 years ago?
Best wishes finishing better than ya started

 

Interesting info in this thread. One time just before covid, I had a few positions running for a few gbp in the run up to an Easter weekend. I had 500gbp in my account.
Came back next day to check and my positions were closed and all monies gone.

Called the provider because I didn't understand. Was told the shortages in run up to such holidays meant for a split second the market spiked resulting in my losses. None of the historic charts showed any such spike.

I decided I didn't trust them and that such trading wasn't for me.

 

Were you short the market and it was a spike up, or were you holding shares on margin and it was a spike down. Those would be the only situations where a broker would have the right to sell your position to cover your losses. Otherwise, it doesn't matter what the situation was, you should at least have the shares in the account. But even then, if such a spike does not show in the charts then someone was fooling you. This sounds like something that should be turned over to the authorities.

 

I had positions open both ways specifically because I would be away for a few days and wanted it to stay in balance whilst I was away. By saying 'in balance' i mean that if one position went into negative, it would be offset by another being more positive.

Apparently, there was a brief price reversal (I don't recall the term) so the buy and sell rates switched about. I looked for any sign of that by going back through the relevant time period but never was the buy rate and sell rate reversed.

I just put it down to a bad experience or stupid decision to partake in it.

For clarity; I was in the FOReign EXchange currency markets, gbp/usd

 

Money corrupts. When I die, I plan to be penniless--on paper. Though my kids will inherit a fortune, and will not have to worry about taxes, and my advice to them is to stay poor on paper. That is the beauty of offshore holdings. But you can also maintain a sense, or at least try to, that you don't have money, and perhaps by that, it won't corrupt you.

In the 80's and early 90's, when I was an analyst in Japan, I had money, I had a column in an English version of a Japanese newspaper, I had connections, my mistress was a TV actress and one of the most beautiful women I have ever seen (she's my wife today), and it all went to my head. I have always had a strong moral compass, but I did things during that time that I am not proud of. Not criminal things. I didn't kill anyone. But things that people do with power. In all fairness, some of the things someone could argue, were justified---I manipulated and used my first wife, but she manipulated me and many people around me to control me, well before I ever used her (and of course, in the end, she stole almost all of my first fortune out from under me). And I wasn't a complete monster. For example, when Mt Pinatubo exploded in the Philippines, my wife and I put together all the food and supplies we could stuff into a jeepney and drove up to the Mt Pinatubo region to look for refugee camps of the Aeta tribesmen and distributed everything, not to show off, or to say we did it, but because we really felt they needed it. We did that several times.

Perhaps it was a tarnished philosophy that overtook me. That's another story if anyone is interested. Anyway--I want to avoid that trap, and I want my kids to not fall into it.

Much of what I am doing now is to pass something on to them. I also question whether I could teach them to do what I am doing here. I'm sure I could teach some of them to read charts. My stock screeners and everything is recorded for them. But one thing I can't do is give them the many years of experience that I had. Including the wisdom of some of my rules, such as, don't fall in love with a stock; don't get greedy; etc. I can teach it, but sticking to it is another issue.



But I want to leave them with an income that will make them comfortable even if they choose not to work. So I will probably shift it into treasury bonds. (Though Trump worries me on how well this risk-free asset will remain risk-free.

 

got it.