"It's just not that easy to make money in the markets; it requires discipline."
These words resonate with self-directed investors who often find themselves underperforming the indices. The new Steady Wealth Podcast website, available at www.steadywealthpodcast.com, delves into the heart of this issue (and others), addressing the reasons behind individual investor underperformance.
In the latest episode of The Steady Wealth Podcast, host Serge Berger dives into the world of zero DTE (days to expiration) options.
He explores the risks and benefits associated with these options, which have gained popularity in recent months.
Berger discusses how zero DTE options are contracts that expire on the same day they are traded and explains how the introduction of options expiring on Tuesdays and Thursdays led to a surge in volume.
He highlights the impact of these options on market volatility and the potential risks they pose to portfolios.
Whether you're a seasoned options trader or just getting started, this episode provides valuable insights into the world of zero DTE options.
"It's just not that easy to make money in the markets; it requires discipline."
These words resonate with self-directed investors who often find themselves underperforming the indices. The new Steady Wealth Podcast website, available at www.steadywealthpodcast.com, delves into the heart of this issue (and others), addressing the reasons behind individual investor underperformance.
Welcome to the newest episode of The Steady Wealth Podcast with your host, Serge Berger.
In this episode, Serge discusses the strategy of sector and group rotation, which has gained significant interest among investors.
He shares insights from his conversations with clients at Blue Marlin Advisors and the Steady Trader, where sector and group rotation consistently emerges as a top priority.
Serge recounts a recent encounter with a billionaire who showed great enthusiasm for this strategy, highlighting the importance of being allocated to certain stocks or asset classes during favorable market conditions.
Serge walks listeners through the concept of sector and group rotation, emphasizing the need to adapt portfolios throughout the economic cycle.
By the end of the episode, listeners will gain a clear understanding of sector and group rotation and its potential benefits for their investments.
Whether seeking professional management at Blue Marlin Advisors or trade alerts on the Steady Trader, listeners can find ways to implement this strategy and optimize their portfolios.
An Options Trader's Take On Market Risk This Summer
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"It's just not that easy to make money in the markets; it requires discipline."
These words resonate with self-directed investors who often find themselves underperforming the indices. The new Steady Wealth Podcast website, available at www.steadywealthpodcast.com, delves into the heart of this issue (and others), addressing the reasons behind individual investor underperformance.
Welcome to this week's episode of The Steady Wealth Podcast with your host, Serge Berger.
In this episode, Serge takes a deep dive into the options market, sharing his insights on its significance and how it impacts trading strategies and investment portfolios. He discusses the recent market rally and provides analysis on what the summer months may have in store for investors.
Serge emphasizes the importance of considering the macroeconomic environment, which is often overlooked by many traders. He acknowledges the concerns surrounding the macro environment and highlights the role it plays in shaping market trends. Serge reflects on his own trading experiences over the past few months, particularly in relation to the counter trend rally he observed.
Drawing from his expertise, Serge explains the distinction between macro environments and fund flows, highlighting how the latter dominates in the multi-week and multi-month timeframes. He shares valuable insights obtained from the options market and its role in understanding investor sentiment.
Serge presents various statistics and indicators to support his analysis. He discusses the heightened call buying activity, increasing implied volatility, and extreme market moves. He provides visual representations of market trends and discusses the implications of extended market conditions and their potential impact on volatility.
Additionally, Serge examines the relationship between options market behavior and the broader equity market, discussing the nuances of the VIX and the importance of monitoring the implied volatility of different strikes and expiration points.
Serge concludes by addressing concerns about liquidity in the market, highlighting factors such as the Treasury general account, student loans, jobless claims, and interest rates that contribute to potential liquidity constraints. He emphasizes the need for cautious investment strategies given the current market conditions.
"It's just not that easy to make money in the markets; it requires discipline." These words resonate with self-directed investors who often find themselves underperforming the indices. The new Steady Wealth Podcast website, available at www.steadywealthpodcast.com, delves into the heart of this issue (and others), addressing the reasons behind individual investor underperformance.
In the latest episode of The Steady Wealth Podcast, host Serge Berger dives into the topic of the economic recession.
Frustration is growing among investors due to the lack of a noticeable economic downturn, especially in the equity market.
Serge focuses primarily on the United States economy but also touches on Europe and China due to their interconnectedness.
He discusses the performance of the S&P 500 and NASDAQ 100, noting significant gains year-to-date.
Serge presents two different camps of thought: the bullish camp, which believes the market won't go much lower due to extreme negativity and a strong consumer, and the bearish camp, which looks at interest rates and the potential impact on economic growth.
He discusses the timing of a recession and highlights problems in regional banking and commercial real estate.
Serge concludes by stating that an economic recession is imminent and advises investors to prepare for a potential downturn.
"It's just not that easy to make money in the markets; it requires discipline." These words resonate with self-directed investors who often find themselves underperforming the indices. The new Steady Wealth Podcast website, available at www.steadywealthpodcast.com, delves into the heart of this issue (and others), addressing the reasons behind individual investor underperformance.
In this episode of The Steady Wealth Podcast, host Serge Berger discusses the topic of artificial intelligence (AI) and its impact on the market.
He begins by emphasizing that risk assets, including AI-related stocks, don't move in a straight line but experience pauses and corrections along the way.
Berger shares his personal experience of using AI and how it has improved operational efficiency and cost savings for his business.
He then discusses the phenomenon of companies mentioning AI in their conference calls, which triggers algorithmic trading and drives up stock prices.
Serge highlights the rapid pace of technological adoption and the potential for volatility in the AI sector.
He cautions investors about the risks and advises them to be cautious and not underestimate market volatility.
Berger also mentions the importance of using indicators like the Relative Strength Index (RSI) to identify overbought and oversold conditions in volatile stocks.
Overall, he acknowledges the transformative power of AI but reminds listeners to approach the market with a realistic understanding of its ups and downs.
Why Self-Directed Investors Underperform the Indices
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"It's just not that easy to make money in the markets; it requires discipline." These words resonate with self-directed investors who often find themselves underperforming the indices. The new Steady Wealth Podcast website, available at www.steadywealthpodcast.com, delves into the heart of this issue (and others), addressing the reasons behind individual investor underperformance.
Looking at actual statistics paints a sobering picture. A staggering 70% of US equity managers underperform their respective indices on a one-year basis, and this number climbs to a disheartening 90% over a ten-year period. Over a 20-year span, the S&P 500 has returned an average of 7.5% per year, while a typical 60/40 portfolio has yielded approximately 6%. Astonishingly, the average investor lags behind at a mere 2.9% per year.
One key problem lies in the trading-centric mindset adopted by most individual investors. They fail to tap into the power of compound interest, shying away from the proven strategy of buy and hold. Diversification becomes an afterthought, and distinguishing reliable information from dubious sources becomes a daunting task. Lack of discipline further hampers their ability to adhere to a long-term investment strategy. Overconfidence bias is a common pitfall among individual investors, leading to detrimental decisions.
To combat these pitfalls, it is recommended that self-directed investors allocate only a fraction (10-20%) of their assets to a trading portfolio, while entrusting the rest to professional guidance. By taking a free 3-minute risk survey at www.bluemarlinadvisors.com, investors can gain valuable insights into their risk profile and make informed decisions to maximize their long-term wealth.
What You’ll Learn:
What it means to be an individual investor.
Why individual investors underperform on average.
How to understand your risk profile and correct it.
And much more!
Favorite Quote:
“Individual investors often exhibit an overconfidence bias.” -Serge Berger
Breaking Down the Current State of the Stock Market: What You Need to Know
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The current state of the market remains uncertain, with potential challenges ahead in the coming quarters. Serge is joined by Brian Terry, a colleague from The Steady Trader and Blue Marlin Advisors, to discuss the US markets slow-down. The overall sentiment is negative, as inflation is still not under control, making this year a tough one.
The looming debt ceiling debate adds further volatility, with politicians seemingly waiting for market turmoil before taking action. This situation resembles the uncertainty surrounding Brexit, where a last-minute deal is expected. However, past experiences, like the 2011 default that led to a 6% drop in the S&P, indicate that increased anxiety may occur as the deadline approaches. Failure to reach a resolution could bring short-term pain to the market.
As it is an election year, the divide in opinions is hardened, and there is mounting political pressure on the Federal Reserve (FED) to take action. The current administration seeks to instill hope in the market by urging the FED to act. Amidst these conditions, there is a significant shift towards active management funds, with a focus on longer-term investment strategies and seeking opportunities such as dividend captures or selling covered calls. It is crucial to adopt a more cautious and strategic approach after the prolonged period of essentially free money and irrational market behavior.
What You’ll Learn:
How other countries' markets are fairing compared to the US.
A few ways you can still make an income from this market.
How a covered call strategy works.
And much more!
Favorite Quote:
“Our big focus is, and should be on, our longer term investments.” -Brian Terry
I’m Shocked At People’s Attitude Towards The Markets
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The attitude towards money and investing among the majority of people is concerning, according to Serge. Despite the economy being at a point where it needs a healthy slowdown, people continue to show a lack of seriousness toward their finances. Most people have forgotten that the markets go up and down, and there are economic cycles. People tend to have shameless greed and want to make as much money as quickly and as cheaply as possible. This attitude has resulted in people not taking long-term asset allocation seriously, and instead, they trade with 80% of their money while investing only 10-20%.
Serge advocates for the opposite approach, advising people to trade with only 20% of their money and invest the remaining 80%. He suggests spending more time on the long-term investment strategy instead of the short-term trading approach, which is the major fault of financial media and brokers. Serge believes that after two years of a bear market, people should not have a gambling mentality, but instead focus on the power of compound interest. He concludes that there comes a point when it's too late to fix one's portfolio for retirement, and it's essential to start taking investing seriously.
What You’ll Learn:
The difference between investing and gambling.
How different generations tend to view investing and trading.
Ways to boost the long-term bucket when markets go sideways.
And much more!
Favorite Quote:
“I’m truly, honestly, sincerely, shocked at people’s attitude towards the markets and more specifically, their money.” -Serge Berger
Trading and investing are two distinct approaches to building wealth in the stock market. While trading involves attempting to profit from short-term market fluctuations, investing aims to generate long-term wealth through a diversified portfolio of assets.
The average annual return for the stock market has been around 10.3% per year, while day traders have experienced only a 3.5% return. Despite this, many individuals are still allocating too much of their capital to trading, hoping for big wins rather than steady gains.
Investors understand that there's a time, place, and amount of money to trade with. They typically invest in a diversified portfolio and aim to make the most of their money through this strategy. Swing trading, or the "fun bucket," can make up around 10-15% of their portfolio, while day trading, or the "drunk bucket," should only make up around 5-10%.
Trading requires active management and can lead to higher fees and a lot more time invested. In contrast, investing is more passive, allowing individuals to buy and hold their investments over a longer period. Investors can compound their interest over time, leading to significant long-term gains.
While trading can be an exciting and potentially lucrative strategy, it's important to do it with far less capital than investing. Ultimately, investing has historically outperformed trading, and individuals should aim to allocate more of their capital toward this strategy for long-term wealth building.
What You’ll Learn:
Why it’s important to diversify your portfolio.
The differences between investing and trading.
What the 3-bucket approach is.
And much more!
Favorite Quote:
“Quick profits, from a psychological perspective, is rooted in greed.” -Serge Berger
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