“The key to a successful investor is to be an informed investor”

[text_block style=”style_1.png” align=”center” font_size=”16″ font_color=”%2301344b” top_padding=”20″]Mirriam MacWilliams – Chief Trainer / Wealth Mentor[/text_block]

In our second episode, Mirriam MacWilliams, Chief Trainer of Wealth Mentor shares with you tips on where to put your money, and how much of it to put in your investments.

Video 2 – Where To Invest and How Much

[text_block style=”style_1.png” align=”left” font_size=”16″]How much of your savings should you set aside, for investing?

That will depend on the instrument that you are going to use for investment purposes. I believe that in growing your savings account as much as possible, and then using as much as possible of that money, to grow it.[/text_block]

YOUR MONEY MUST WORK FOR YOU

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[text_block style=”style_1.png” align=”left” font_size=”17″]I am not in favour of having your money under the mattress, for example, because your money needs to be positioned so that it can always work for you. You want to be able to keep pace with the rising cost of goods and services, and this is not going to happen if your money is parked in a cookie jar.

You can create a very nice portfolio, have your money positioned so that when opportunities in the market place arise, you can take advantage of these positions.

The amount of capital that you are going to invest is predicated on the instrument that you are going to use on investment purposes.

So, for example, someone who is inclined to buy stocks is going to have to set aside a little bit of a wider capital base, than someone who is going to use options because they are going to be leveraging that investment capital.

But there are different instruments of trading and different capital requirements. And just based on where you stand, how comfortable you feel purchasing stocks and leveraging your capital.

Beginners are advised to take up instruments that involve less risks. Which would that be?

I would say that, my personality does not lend itself well to buying individual stocks. And I probably think that the individual person may not be suited for individual stocks as well.[/text_block]

YOUR MONEY MUST WORK FOR YOU

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[text_block style=”style_1.png” align=”left” font_size=”17″]If I am going to participate in a particular stock, I would prefer to leverage my capital and use options. I think that when we get to a certain point in our lives, or if I am bullish on the retail stocks for example, I am going to not try to cherry pick the stock as much as I am going to try to participate in the whole basket of stocks.[/text_block]

RISK IS PART OF INVESTING

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[text_block style=”style_1.png” align=”left” font_size=”17″]If I am going to participate in a particular stock, I would prefer to leverage my capital and use options. I think that when we get to a certain point in our lives, or if I am bullish on the retail stocks for example, I am going to not try to cherry pick the stock as much as I am going to try to participate in the whole basket of stocks.

In the US, that is a very wonderful opportunity, because now, risk is so much more minimised. Risk is a big component of investing. We have to first learn to identify a risk that is going to present itself, anytime our money is in the market. And then we have to seek ways to minimise the risk, or eliminate it completely.

Which areas do you feel are of lower risk?

I find option trading to be lower risk than owning a stock. Because when people buy a stock, and that has happened to me, and when the stock starts going against me, maybe I bought a stock and that’s going down, I have a tendency of burying my head in the sand. I had that tendency.

My experience was that I was not experiencing a loss, until I sold it. And that was a very dangerous thing for me to do, because my retirement account was experiencing seriously some strong losses. I then realised that if I invested in options, options forced me to take action. If a trade is going against me, I have to take action, or action will be taken for me. So that’s why I found for me, options was less risky than stocks, because I was able to draw a line, and control my losses.

What about property and real estate?

They are wonderful opportunities. In the states right now, we are at a point where real estate prices are a little high. Interest rates now are causing home prices to level off.

What I did was, I made my money first in the stock market, and then I started to look at all different types of business opportunities, or real estate opportunities, that presented themselves. But first, I did generate my wealth through the stock market, I found it easier.

Stock markets are really unpredictable. How much time should you set aside to monitor you investments?

For me, I welcome market fluctuations, because that is now how I am making money. For someone who has a keen sense about how market works, is not concerned about the daily fluctuations of stock prices. So that, a person who is looking to invest, we are talking about investing here, with a perspective of generating a nice 100% return on capital, in a two, three, four week period of time, I would say, monitor the market maybe 15 minutes in the evening, the least amount of time, the better.[/text_block]

Joe Mason

Joe Mason, Teacher

have seen fantastic growth in my account! I really enjoy the process and I hope within the next two years to quit my day job and live off my trading!”

Pedro Robert

Pedro Robert, Financial Planner

Within two weeks of going live I had taken 5 trades. Three have been exited. Two positive exits PCP & GOOG and, one negative LZ. Overall, I was up over USD20,000. Started account with USD46,000 so how it’s at USD66,000 approximately.

RISK IS PART OF INVESTING

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[text_block style=”style_1.png” align=”left” font_size=”17″]I realised that when I have the time to monitor the market, the results are not as favourable for me. You cannot monitor the daily fluctuations of stock prices, because they are not good for your overall long-term investment goal.

Should beginners diversify their portfolio? Should you be looking at short-term, or long-term?

Those are questions that only you really can answer. You know how much time you have, to invest in the market place and also where you stand financially.

For me, I look to be in the trade, for about two, three, four weeks. That’s as long term as I want to be. I look at every position that I take, as a potential opportunity to capture a very nice return. If it happens in that period of time, I am very happy taking my money off the table.[/text_block]

RISK IS PART OF INVESTING

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[text_block style=”style_1.png” align=”left” font_size=”17″]Is there such thing as a safe loss-proof investment?

No, I have not come across one yet.

So what is the key to a successful investor?

I think the key to a successful investor is to be an informed investor – to be able to start with a very small capital, to be able to learn how the stock market grows.

As the stock market starts to grow, go back to your previous question about learning how not to stuff all your money into one stock. We need to learn how to diversify our portfolio so that we have a certain amount sitting in cash.

Cash is a position too, and that money, while not in the market, is generating interest. And so be able to position ourselves only when the opportunity for being able to generate a strong return is the highest.

A lot of time, investors forget, they always think about capital appreciation. But capital preservation is also very important. What would you say, to sum up everything we have talked about this morning – the three key main points when it comes to capital preservation, that an investor should consider.[/text_block]

YOUR MONEY MUST WORK FOR YOU

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[text_block style=”style_1.png” align=”left” font_size=”17″]An investor should always have a point of be able to get out, to the upside, have the stock when it goes in their direction, to be able to have a point at which they want to exit. But by the same token, have the point where they want to exit at what may be a potential loss.

You need to have a trading plan, you need to follow that plan, and never trade without a stop-loss.[/text_block]

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