Figure Out WHY You're Trading and Investing Most folks would think the goal of investing is 'always make money'... But the reality is more nuanced. Many investors – especially those who trade – enjoy the activity. Investing can be intellectually engaging and a lot of fun... and there's nothing wrong with that. I often use gambling analogies to talk about investing, and this is another case where one applies. For those who enjoy gambling, ask yourself – why do you gamble? Again, the obvious answer would be to make money. We know the reality, though, is far different. And this is where the analogy gets interesting... When gamblers lose money, they're considered to have a problem. When investors lose money, they're often jokingly considered "value" investors. There's a critical difference between the two. With gambling, the house always wins – eventually. With stocks, investors always win – as long as they're investing in solid growth companies. So, why do you invest? If it's for the thrill of the game, that's great. But if your goal is to make truly outsized returns, you need to have a plan... I've often emphasized how some of the basic rules that apply to successful professional gamblers also apply to trading and investing. These are concepts like managing your bankroll, betting more on high-probability bets, and knowing when to walk away from the table. The same sort of strategy can apply to your investment portfolios... And that means asking questions like: Do you want both an investing and a trading portfolio? If so, how big should each of them be? What is the goal of the investing portfolio? Is it just maximum return? How much do you care about volatility and drawdowns? And likewise with your trading portfolio, how active are you willing and able to be?You can answer these questions in different ways, and the answers will differ for each individual. But the most important thing is that you're asking these questions. While it's important to consider what your plan is around these questions, it's most important that you actually have a plan. The vast majority of investors never really even ask themselves why they do what they do. They never question what their goals are or how to achieve them. If your goal is to make big returns, you need to invest accordingly. When it comes to big returns, I've been bullish on a particular corner of the tech sector... I'm talking about "generative artificial intelligence" ("AI")... and it's drawing the attention of the world's biggest tech companies. For example, Microsoft (MSFT) has invested $10 billion over multiple years in OpenAI, the company behind the so-called chatbot ChatGPT that has taken the media by storm... Alphabet's (GOOGL) Google has called Microsoft's investment a "direct threat" and a "CODE RED" for the company... On a company call, Meta Platforms (META) founder Mark Zuckerberg called this tech "the major technological wave driving our roadmap"... And Apple (AAPL) CEO Tim Cook said on an earnings call to shareholders that it was "a major focus," and it has the potential to "affect every product and service that we have." This revolutionary technology is opening up a major opportunity for investors... and right now, I've identified my favorite way to play the trend for potential 10-bagger upside. In a brand-new presentation, I share the full details – watch it here. Regards, Enrique Abeyta March 10, 2023 If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply sign up here. |