Recently, I came across a subscriber where she said she is unlucky when it comes to investing. I thought that was pretty interesting because I used to think I am cursed when it comes to investing.
In this video, we will talk about:
Why luck matters when it comes too investing?
When does luck matter when it comes to investing?
How does timeframe affects luck?
If you feel like gambling, what you should do.
Why do you need to focus on the big picture to start making money?
The 4 signals that are causing you “bad luck” or losing money when it comes to the stock market and probability
How to get 30% from the stock market in the next 12 months (free case study):
Investing Accelerator program! We're open for enrollment! Schedule a FREE consult to see if we're a good fit! :
Transcript with 90% accuracy:
Welcome back to my channel. And today we’re going to talk about luck when it comes to investing. So a couple of days ago, I came across a subscriber who said she’s quite unlucky when she’s investing in the market. And that really resonated with me because when I first started out to learn how to invest, I thought I was unlucky too. And I actually thought I was cursed because every time I buy the stock would go against me. Every time I sell, the stock will go back up. So for a period of time I actually thought I was cursed as if my friends would actually bet against me and saying that would be a sure winning strategy. So that was many years ago and now obviously as master investing, and I know the truth behind luck, so when people talk about luck, most people refer to kind of like a 50, 50 chance.
It’s kind of like flipping a coin. It’s kind of like going to the casino is kind of like gambling. So I do agree that there is an element of luck involved when you’re investing in the market. But the key thing when it comes to investing, it’s all about timeframe. You know, for myself, I have been a day trader, a short term trader or a swing trader and a long term investor. So I have pretty much tried and tested all the timeframes there are. And when you assume into the market like a one minute chart, five minutes, 50 minutes, 60 minutes or four hours, the chances of you winning or losing without an investing strategy is actually 50 50 slightly less than 50 to be very precise. And when you’re investing using a short term timeframe, it just feels like you’re in a casino. You know, if you, if you’re a day trader, you would probably know what I mean because you’re trying to place so many trades that you know that given any lightly given 10 or 100 trades, there are going to be a certain amounts of losers.
Now, the number of losers is going to mainly depend on your risk to reward ratio. I have another video on that. But if your risk to reward ratio is approximately one to one, then your odds of winning and losing is also around 50 50 so we can see that depending on your risk to reward ratio, you can kind of design your own casino game. And that’s how I used to think. And when you’re investing in the market, it’s easy to fall into the trap that it is out of your control. And that’s mostly based on luck and that’s really where people have a gambling addiction can cause huge problems when investing into the market. And after around six, seven years of testing, I finally figured out a strategy that works very well for me, which is being a long term investor.
If you think you are unlucky, you know here are a couple of reasons that might help you out. Now the first one is you’re looking too closely at the market and we just covered that. And if you’re using a timeframe that is below the daily chart, you are looking at the markets too closely. For myself personally, I used a weekly charts. I don’t even go into the daily charts unless I necessarily have to. But I used a weekly chart and my target return is 30%. So what it is totally possible to get 30% return with weekly chart. So you don’t need to day Trey, you don’t need to short term trade, you don’t need to
Be glued to the computer every hour of the day. Now if you feel like you’re unlucky, the second reason might be you’re focusing on the wrong stocks. Now in the stock markets, there’s 4,000 stocks in Toronto and New York stock exchange combined and you can invest from blue chip companies like Starbucks all the way to penny stocks. So depending on the kind of stocks you’re investing in, you can either feel like it is predictable, it is going up consistently or you are investing in like a tornado or a roller coaster. And that’s the market just goes up and down by such a high amount every single day that you feel lost and confused. And during the Corona virus. As I’m recording this video for you, a lot of people are going to get confused by the amount of folate utility in the market. You know, one day it will go up by 10% and the next day OCO up by 2% and the next day it will go down by 10% so you see this range plus or minus 10 20% within a day can be quite exhausting for people.
And you know, if you are looking at a short timeframe then it’s very easy to think that you are unlucky. But if you take a step back and you focus on the long term timeframe, then suddenly everything falls into place. So if you focus on riskier stocks such as penny stocks, small caps, then that might be another reason why you’re feeling unlucky. Now the third one, the third tip is really you focus on stocks that you don’t know. Well, and this is quite counterintuitive because a lot of people suggest you to do research from the ground up. A lot of people suggest you to filter to the markets based on some sort of PE ratio or PS ratio or some sort of debt to equity ratio. So then you find good stocks. Now the biggest problem with this approach is that a good stock to me is not the same as the good stock to you.
For example, I have a very strong accounting and background, so I know technology stocks quite well and I will be very comfortable investing in technology stocks, which I know some other students or some other people will not feel so comfortable in. And in my program I have doctors, I have engineers, I have accountants, and for example, doctors will be looking at pile medical stocks. They’ll look at stocks that make drugs. And for them, these are kind of straightforward, intuitive stocks that they can invest in and take advantage of if they know how to do proper research. So when you are thinking about investing in the stock market, you really want to know what is your advantage what do you do for a living? Like, how does what you do for a living lead you to find great companies to invest in? So you want to use that to your advantage because when you do that, you’re going to be miles ahead of other investors who don’t.
And whether you know it or not, the stock market is very competitive, especially for beginners because there are some seasoned professionals who have a lot more information than the rest of us and they can take advantage of these opportunities with teams and teams of analysts doing research day in and day out. So as a solo investor, as you want to get ahead of this game per se, then you need to focus on where your edges. So that’s why I don’t invest in stocks to, I don’t know. And that’s actually very similar to what of Warren Buffett’s rule. So those are the free tips for if you are feeling unlucky in the market. I remember when you master investing, when you have a good approach to investing, then you wouldn’t feel unlucky anymore because you realize that you actually have a lot of control over what you’re investing in, what your investing style is, how long you hold it for, how do you manage your risk, when you should enter, how you should enter, should you use options to multiply your profits?
All these are elements that is within your control. And I think that’s, there is an element of unpredictability in the markets. You don’t know exactly when it is going to go up. You don’t know exactly when it is going to go down. But if you assume out and you look at the big picture, then you send me realize there’s actually a lot of elements you can control. So that’s pretty much it for this video. My name is Eric Seto and my goal is really to help people with out a financial background to master investing and target a 30% return using an hour a week. So if that’s something you’re interested in, you can watch the free case study I have below call the free webinar, how to get 30% from the market. So this is quite a long webinar and a pack, a lot of value in it.
So if that’s something you’re interested in, you can click the link below, type in your email address and I’ll see you inside. And if you you want to learn more and join the program, investing a celebrator, you can also schedule a call with me and we’ll have a chat on whether you are at good fit. So that’s pretty much it if you are feeling unlucky in the markets or you’re feeling down, don’t. Because once you master investing, once you have a solid strategy, you will feel like luck is on your side. I’ll see you next time.
So thank you for watching and I hope you enjoyed the video. Please help support me by like, subscribe and you can watch the next recommended video here as well. So I’ll see you in the next one.