Reduce Risk With A Hedge Fund
(but without a lot of money)
John C. Brandy, CFEd®
How about a new way of having the advantages of a hedge fund, without having millions of dollars first?
Here's a perfect example of what most people think:
But in fact you don't need a million dollars, and you don't need to pay someone 2%, and everything else in that story.
Definition of Risk Management
The basic idea is simple: everything worth doing has some element of risk. Saving too little is risky because of prices that go up every year. Saving too much in areas where you don't have enough time or expertise can cause you to lose more than you started with.
So what do people do? Hopefully, they diversify into many different areas so "all the eggs aren't in one basket." The very rich get to play with hedge funds, and the very adventurous will attempt something called Technical Trading.
What's Technical and Value Trading?
Technical trading involves using formulas to decide when to buy
and sell. Value trading, what Warren Buffett does, uses intuition,
business understanding, and other "soft skills" that don't
necessarily involve math.
It's explained very well here, so please check it out.
Technical traders swoon over graphs like this one:
Why's Flipping Wall Street Different?
Flipping Wall Street takes well-known technical strategies and pairs them with most of the stocks in the S&P 500. I say "most" because there are some which just don't fit any of the strategies and so aren't a good idea. The brain behind this is Kelly Korshak, who can be found here and here. He managed risk for Deutsche Bank when you needed $20 million just to talk to him. Now, this software automates his brain in a sense, so you can "set it and forget it."
It's hard because traditionally you have to watch the market all the time, or you have to trust a professional firm to do that for you. Things can change in a heartbeat, and if you're not on an opportunity or a red flag early, you might not get in at all. A professional firm doing it for you will cost an arm and a leg.
OK, But How Am I Supposed To Pick A Portfolio? And How Often Do I Change it?
You don't have to worry about this. I've done that part, back-testing 100 stocks for the past 12 years against what each technical strategy would have done in the real world. I've put my own money into a portfolio of the best 10, and I will review that probably once a year. Like everything else I recommend, I put my money where my mouth is.
You don't change it. At least, that's my advice to save you both stress and money. When I do the annual review of my portfolio, I'll tell you if I made any changes and what they are and we can discuss what you'd prefer. Remember, this should just be a part of your big picture, not the whole thing. No investment should be the whole thing.
We can and probably should talk first since you most likely have some important questions about this!
On the other hand, if you already know you want to start:
Step One: Open Your Account At Flipping Wall Street
This lets them know that you want to get started. You're not committing any money or choosing any portfolio at this point. I'll work with you on that.
Step Two: Open A Brokerage Account At Interactive Brokers (The One For Your Part Of The World)
It's the law in the finance world that someone has to be "the custodian" for investor's money. Open Mind Generations does NOT do that. Flipping Wall Street, which also goes by Robotic Trading Advisors, also does NOT do that. Firms like Fidelity, Merrill Lynch and even robo-advisors all DO that.
So, you have to open an account at Interactive Brokers and link it to Flipping Wall Street. Since I've done this myself, as with everything else I recommend, I have a step-by-step process from experience about what to do.
If you'd just rather bull ahead and hope it's right, there's a button for that.
The cool thing is that Interactive Brokers has branches all over the world, and all anyone has to do is go to the site via the button above. If you're in the United States, you'll go to New York. If you're in Thailand, you'll automatically go to Hong Kong.
Step Three: Set Your Portfolio And Options At Flipping Wall Street
Once upon a time, you had to enlist a broker or a wealth manager to help you with your portfolio, unless you or a really trusted friend knew what to do.
It was a dark time, because customer costs were high and also there were dragons.
Then, as if by magic, the answer came in the form of Open Mind Generations and John C. Brandy.
John helped all the villagers set up their portfolios and options at Flipping Wall Street, using years of personal financial experience and putting his money where his mouth is.
But that's if you're an OMG customer and you don't have to be to do this.
Assuming you do, click this next button. It will take you to a place where you can schedule a one-time free 20-minute call with John, the head of OMG, to determine if this is right for you.
You're welcome to do that on your own if you'd like. OMG makes sense if you want to do this as a part of many other things, like most people.
Step Four: Connect The Two And Go Live
Just to make sure I'm communicating the picture right, there's three legs to this stool. The first is Flipping Wall Street, which is where your chosen strategies maintain constant watch. Next is Interactive Brokers, which is where your money is housed for you. The third is your consultant on what to do. That could be you, it could be a family member, it could be a wealth manager or broker of your choice. It could be Open Mind Generations. Your call.
You don't need any of the third legs to get the connection going. If your portfolio and options from above are already set, then the connection will simply make your site change from SIMULATED to LIVE. After that, well picture a stool with only two legs. You need advice from somewhere unless you have enough experience already.
Step Five: Review For Possible Changes No More Than Once A Year
It does not matter what you are investing in unless you have one of two things:
1. Lots Of Patience
2. Someone Else's Money
Let's say you decided that real estate was a good idea. You decide to buy a house and rent it for profit. You have to be amazingly patient to succeed at that. I just sold two houses after nine years of ownership and it worked out well.
Note that the key there is "nine years". Holding for the long term is typically smart because less trading keeps your cost down. The really smart part though is when you know when and why to make any changes.
When I bought my own portfolio in May 2017, I researched 100 fairly popular stocks to see how they did using this system over the last 12 years. I picked the best 10 and went LIVE. I will check again in late spring of 2018 for myself and for anyone else who signs up.
Conclusion: You Want One Of These
Why? Because it's a rare opportunity. For 15 years as a licensed financial professional, I advised people to not participate in technical trading. Even though technical trading is basically a good idea.
With Flipping Wall Street, it's finally possible to level the playing field in this area. It's automatic, and it works. While there's never a guarantee of a good return in any investing, this team has a target of 20% for annual average gains.
What's This Thing Cost?
That's the best part of this. It could be nothing.
There's an upfront cost from Flipping Wall Street. That and a monthly subscription is the only way they make money. They don't charge fees. so they sell the software platform for only $2495.00. I might be able to get you $500.00 off if you sign up today. Then after 60 days, they'll charge a $79/monthly subscription fee.
So where's the "nothing"?
Recommend it to friends. Flipping Wall Street will pay you back a part of your cost if they sign up. Get about six of them, and you'll get paid back the whole thing.
Then, that target of 20% could be all yours to keep. You know what that means? If you just added $1500 a month, you could have a 2 - 3 million after 20 years. That's enough to retire most places. I still think you should have more than one basket, but you'd be on the right track.
If you have any questions, feel free to reach out to me at email@example.com.
About the Author
John Brandy is a Certified Financial Educator (CFEd®) and a financial consultant who helps you achieve your retirement goals. He is an expert in investing using this platform. Contact John if you have any questions about using regular or retirement funds this way. He is happy to talk with you to discuss your investing goals.