Subscribers Following Along Just Doubled Their Money & Now it’s Your Turn
Apple Inc. (NasdaqGS:AAPL) just hit $207.05, as I write. In doing so, it’s become the world’s most valuable company.
I sure hope you’re on board.
Because if you are, you’ve just doubled your money!
If not and you’d like to be, here’s the simple technique they used to make history.
I call it…
… the Free Trade.
We’ve talked about the Free Trade before, and members of our sister research service, the Money Map Report, had a chance to put it into practice with Apple this week as the stock hit $201.50 and plowed higher.
We’re going to talk about the Free Trade again today because I don’t want you to miss out on one of the world’s most powerful investment techniques. I’d feel very badly if that happened because it would mean you’d be leaving a ton of money on the proverbial table.
There are two reasons to use the Free Trade EVERY chance you get and with every investment you have:
- You can lock in profits regularly, regardless of market conditions; and,
- You reduce or eliminate the risk of future losses.
The concept of a “risk free” investment is not new. In fact, the allure of risking nothing and gaining everything has been around for centuries. Unfortunately, that’s almost never ended well…
…the Tulip Bulb Crisis of 1634-1637
…the South Sea Bubble of 1711
…the Florida Real Estate Crash of 1926
…Bernie Madoff’s Ponzi scheme
…the Iraqi Dinar
In case you’re wondering, the jury is still out on Bitcoin and other cryptocurrencies for reasons I won’t get into today but which have written about extensively in the past.
So why is it that you hear the term “risk-free” in widespread use today?
Because Wall Street and government regulators associate risk with loss.
That’s why they consider U.S. Treasuries and other government paper as “risk-free” choices, even though they know full well that there are risks inherent in every investment.
It’s a game of semantics and they want you to play along because doing so forces individual investors – like you – to implicitly buy off on the most profitable strategy of all (for them): diversification.
That’s the idea that if you spread your risk around in different asset classes and investments – like stocks, bonds, cash, real estate, and the like – you’ll be better off over the long term. The thinking is that not everything can possibly go down at once.
Diversification is also a concept that’s been around a while.
Most investors are very surprised to learn that the theory was first noted in the book of Ecclesiastes written around 935 B.C. It’s also mentioned in the Talmud. Even Shakespeare picked up on it in “The Merchant of Venice” hundreds of years ago.
And, it’s absolutely wrong.
Ask anybody who got their portfolio halved twice in the last 15 years – first during the Dot.bomb implosion from 2000-2003 and then the ongoing Financial Crisis that kicked off in 2008 with a vengeance. Everything went down at once both times.
I’m not the only one who says so either. Warren Buffett notably quipped that diversification “makes very little sense for those who know what they are doing.”
Which brings me to the Free Trade.
I believe you’ve got to think about risk differently in today’s highly computerized and interlinked global markets, especially when it comes to your winners.
My logic isn’t sophisticated.
Nobody’s ever gone broke taking profits, but plenty of people have gone broke taking losses. Therefore, it not only makes sense to concentrate your assets using appropriate risk management but also to harvest your winners when the markets are strong. That way you’ll have the opportunity at hand to continually reinvest the profits rather than being forced to run for the hills when the markets are weak.
It doesn’t matter whether you’ve got a lot of money or just a little, the principles are exactly the same:
- You want to capture profits every chance you get; and,
- You want to take risk off the table at every opportunity.
Preferably both at the same time.
Here’s an Example of How This Works With Our Most Recent Winner
I recommended Apple to Money Map Report subscribers on January 4, 2016, when it was priced at $99.39 a share and naysayers thought it was hopelessly overvalued.
I didn’t let that bother me because I saw the company making a critical pivot away from the devices that conventional Wall Street analysts thinks are so important like iPhones and iPads to services, subscriptions, and what I called ‘the ecosphere.’
That narrative, it turns out, was not only accurate, but prescient.
Apple hit $201.50 on Wednesday before plowing to a new all-time high of $208.38 a share on Thursday. Every subscriber who has followed along as directed has had the opportunity to double their money on what is now the single most valuable company in market history.
I suggested they sell half their shares to capture profits, stash the cash for our next recommendation, and to reduce risk even as they let their remaining shares run. And, run they will as Apple continues to pivot into medical devices, another out of the box idea I told you about long before Wall Street even remotely thought about it. (We’ll come back to that another time.)
Buy a XYZ for $100 and sell ½ when it hits $200. You then let the original shares run or put a trailing stop in… it’s your choice. And, you reinvest the $100 in profits in another opportunity or spend it… also your choice.
Either way, you’ve got more money moving at less risk than when you started.
I call this move a “free trade,” because you not only get back your original investment, but you also maintain all the upside you can handle – essentially “for free.” Even better, because you’ve now “paid” for your investment, you can stay in the game with not an additional dollar at risk… even if the stock you’ve just harvested has a sudden reversal in fortune and goes from hero to zero.
It’s important to note that a free trade works in all market conditions, on any investment, and can be set up well in advance. That means you don’t have to be planted by your computer nor be an aggressive day-trader to make it work.
No other technique I know of comes close in terms of simplicity or effectiveness.
You know exactly what price is required to harvest your gains – and remove your risk – in advance. In fact, you can set up your order to sell half of your investment for at least a 100% gain the moment you buy a stock you’re interested in. Or any investment for that matter.
Contrary to what a lot of people think, the “free trade” is not about reducing potential at all when it’s properly executed. That’s because you can then take the money you’ve pulled out of a free trade and immediately lateral it into another opportunity while letting the rest ride.
The Power of Free Trades
There are many benefits to free trades, and they’re pretty straightforward:
- They help you capture major winners.
- They pay for their initial investment.
- They help grow capital faster.
- They cut your risk down to nothing.
- They inject automatic discipline while removing emotion.
Then, you repeat the process every time an investment hits 100%.
Good markets and bad markets… it makes no difference. Every profit you capture and every free trade you harness means you have more money working at less risk than when you initially bought in.
Imagine how fast your money will grow if you do this once, twice, three times or more – all from a single risk management tactic used at the right time.
And all because you’re using profits the markets want to hand you.
Best regards for great investing,