Neil here. I hope you’re staying safe and healthy.
Over the past few weeks, we’ve talked a little bit about how market pullbacks – like the one we find ourselves in now – can be surprisingly fertile ground for angel investors.
For starters, valuations tend to drop during rough economic times. Founders can’t exactly justify a $50 million valuation with no revenue during a recession… and lower valuations mean more equity per dollar for angel investors.
But even if deal terms didn’t change at all, I’d still continue to write checks, no matter how turbulent the global economy seems. And the reason for that is simple: angel investments are long-term commitments. Any stake you claim right now will probably need two or three years to mature at minimum – at which point the economic fallout of COVID-19 could be far in the rearview.
But the question remains: how can everyday people pull in outsized returns while we wait?
Because let’s be honest – while we all love the excitement of investing in early-stage companies with the potential to change the world… the reason we’re all here is the same. We’re chasing unicorns. We’re tired of seeing our brokerage accounts gain 5% or 10% a year. And we know that better returns are out there somewhere.
In my experience, angel investing has been one of the most reliable and consistent ways I’ve been able to bag unbelievable returns. But the process takes time; and I don’t know many people who can wait two or three (or more) years with no income at all.
In my opinion, the next best thing has to be options trading. It’s so much better than just buying and holding traditional stocks for three main reasons.
First of all, it’s fast. You can place an options trade in the morning and profit before lunch. I’ve seen traders get in and out in less than thirty minutes. Anything is possible.
The second thing I love is that you don’t need a ton of cash to get started. Right now, Netflix (NFLX) is $440 per share. That’s a big stack for someone to cough up! But you can trade NFLX options for as little as $4.
Finally and most importantly, successful options trades can (and often do) beat the returns you’d get from traditional stock market investments.
My friend and colleague, Tom Gentile, is one of the most accomplished options traders out there. His passion is teaching people exactly how they can have a shot at life-changing wealth using these strategies.
One trade he recommended, in the SPDR S&P Biotech ETF (XBI), is a perfect example of how trading options can beat regular buying and selling. In 22 days, XBI stock rose by 8.6% – a bump that’s actually pretty big compared to average market returns.
But in the same amount of time, the options trade Tom put together would have kicked back an impressive 179% – or almost triple the amount put in.
Now imagine the possibilities if you were to make multiple successful trades every week, or even every day. The upside potential is absolutely staggering.
But options trading can be risky, just like any other form of investing… which is why we’re so lucky that experts like Tom are here to act as guides and mentors. He has a wealth of resources available to anyone who wants to learn more about how to get started. Just click here to learn more.
We’ll talk soon.
Until next time,