Are you a speculator?
If not, you should be …
Many successful investors set aside a portion of their
portfolios for speculating in the stock market. I refer to it as
The percentage generally ranges from 1-5% of an investor's
portfolio. This portion of a portfolio is used to bet on stocks
that usually have more potential than actual substance. Typically
this means betting on penny stocks or stocks trading on the OTC
market or pink sheets. In most cases, that's a futile endeavor
Now, you're not going to read about how to invest this way
from Warren Buffet, Martin Zweig or Benjamin
Graham. However, this does not mean that speculative
investing shouldn't be part of your portfolio. In fact, it should
be taken just as seriously as your overall investment philosophy.
In fact, a sound philosophy should be developed for the "fun
money" portion as well.
The goal, just as with the larger portion of the portfolio,
should be to minimize risk. Just because you're speculating
with this small part of your portfolio doesn't mean you want to
lose money any more than with a more conservative investment.
There are several ways to speculate in the stock market. As an
options strategist I like to use options as my vehicle for
speculating. However, most investors generally tend to think of
speculating as focusing microcap or penny stocks. These are
companies usually with a market cap below $100 million.
Although these stocks should be analyzed just like other
stocks in your portfolio, you need to be extra careful. We've all
heard about the pump-and-dump schemes that dominate the microcap
space. That's when unscrupulous investors artificially inflate
the price of a stock they own in order to sell it at the higher
But there are legitimate opportunities that can truly enhance
the overall returns of your portfolio.
That's why I want to introduce to you our newest service,
The 100% Letter
. My esteemed colleague and, more importantly, successful analyst
Tyler Laundon has made a habit of providing his readers with
rock-solid speculative picks for years. In fact, he's been so
successful with midcap and microcap stocks that our boss, Ian
Wyatt, asked Tyler to focus his energies on this sector to bring
you the best - and safest - opportunities in this space.
Why spend your valuable time sifting through the universe of
10,000+ midcap and microcap stocks when Tyler can bring you
potential returns of 100%, 200% and even 500%. He's been able to
deliver such gains time and time again over the past several
There's another reason to trust Tyler with your speculative
capital. Neophyte investors often get carried away and are unable
to keep the speculative portion of their portfolios within the
1-5% range. Many often ride a speculative investment up just
to ride it back down again. This is why having Tyler on your side
is such an enormous asset. He gives you buy
sell signals with each recommendation so your profits won't slip
I've found that you typically need more discipline with
speculative investments (and many investors have enough trouble
maintaining discipline with their regular strategies). That's why
speculation is only for the bold, disciplined
It almost sounds like a paradox - being disciplined to be
speculative - but it's impossible to be successful at speculation
without maintaining strict discipline. Otherwise, your "fun
money" will become "dumb money," which defeats the purpose of
speculating in the first place.
One thing is certain: Tyler WILL help you to stay disciplined.
Buying in tranches, keeping position sizes small, setting and
following profit targets, finding the right entry point - these
are all part of Tyler's arsenal for smart and safe investing when
going after the big-hit winner.
If you'd like to learn more about Tyler's successful investing
philosophy, don't miss his upcoming teleconference. On June 13
at 2 pm ET, Tyler and Ian Wyatt will be presenting "The Secret to
Finding 100% Winners." Attendance is limited.
Click here to reserve your seat today
Editor and Chief Options Strategist
The Strike Price