Taking a lot of small risks, when added up, may actually be a
safer strategy than pursuing just one or two "safe" plays.
Let's play a game.
I flip a coin. If it's heads, I'll pay you $150. If it's
tails, you pay me $100. Is this a game you want to play?
Well, if we played only once, I'm guessing the answer is
probably "no." For most people losing $100 is far more hurtful
than taking the risk to win $150. If $100 doesn't scare you off,
what if I change the numbers to $15,000 and $10,000. Would you
still like to play?
The reason? Loss aversion. Loss aversion is a tendency to
avoid risks that are skewed in our favor because we abhor the
idea of losing.
Now imagine I allowed you to play the game as much as you
want. In this case, you'd be foolish to reject my offer. Every
coin toss puts you, on average, $25 ahead, and the chance of
losing decreases as you play more. (
I've talked about this mathematical fact numerous times in my
Options Advantage service, particularly when discussing my
high-probability options strategies.)
So in this case, taking many "risky" decisions ends up adding
to a fairly safe bet.
When considering a so-called "risky" investment, the decision
is much like the coin-flip game you can only play once. You may
win, but there's also a good chance you'll lose.
But ultimately having a long-term approach allows you the
benefit of playing the multiple coin-flip game. The more you
play, the safer it becomes.
That's what I do in my
service and that is exactly what my esteemed colleague, Tyler
Laundon, is doing in his new service - the
Over the past few months he (and his subscribers) has enjoyed
big wins, including returns of 221%, 111%, 157% and most recently
Of course he has had some losers along the way. Who doesn't?
But Tyler allocates only small percentages to each position -
otherwise known as asset allocation or, as I like to call it,
Even a small amount of money invested in these stocks can make
a big, positive impact in terms of your portfolio's total
So I don't need to explain the importance of setting aside at
least a small portion of your portfolio for investing in a select
few stocks with tremendous upside potential. The question, of
course, is how to identify those special stocks.
For the answer, I turn once again to Tyler …
In fact, there is one common thread among all of these stocks
that resulted in their handsome gains. And that thread is the
subject of Tyler's live investing seminar that our own Ian Wyatt
is hosting this Thursday at 2:00 pm -
The Secret to Finding 100% Winners
During this free, interactive event you'll find out everything
you need to know about Tyler's strategy … and how you can safely
put it to use with just a small portion of your portfolio to
capture more of the big gains that we've enjoyed over the past
Attendees at Tyler's seminar will learn the following:
- Everything you need to know about Tyler's powerful secret
signal, including exactly how it shows you which stocks are
ready to break out and double your money.
- How you can safely apply his strategy, and capture these
big gains with reduced risk, using just a small portion of your
- All the details of one fast-growing stock that could double
within the next 12 months.
To reserve your seat at this special free event, simply
click here to get signed up
Remember, even the safest investments have some risk attached.
So don't make the mistake of going for the big hit just once or
twice. If you do, investing will resemble the one-toss coin flip
rather than the multi-toss version. This means that the safest
option, in the long run, may be to take some chances.