Neil here. Last week, we chatted a little bit about alternative ways to bring in cash as an angel investor.
Even if you make 10 angel investments a year, you’ll invariably have to deal with some “down time” – after all, a typical investment takes 3.5 years to pan out. That’s why so many angel investors lean on a variety of income-generating strategies on the side.
The most obvious of these include investing in blue chip stocks – corporations with large market caps and longstanding reputations for quality and reliability (think Berkshire Hathaway, Apple, Johnson & Johnson, Comcast, and so on). These stocks are unlikely to drop precipitously unless there’s a major disaster. On the other hand, they’re relatively stable – which means they may not grow very quickly, either.
Other strategies include investing in real estate; funneling extra cash into IRAs and 401(k)s; and investing in REITs, BDCs, and other dividend stocks.
Some of the more enterprising angels out there will make their monthly nut by starting their own businesses. Some statistics indicate that almost two thirds of angel investors are also entrepreneurs – not surprising, really, once you think about the amount of exposure these groups have to the excitement and joy of building businesses.
But if you ask me, one of the best ways to bring in reliable income is also one of the most underused and underappreciated.
I’m talking about pattern trading – using historical patterns that appear over years of data to make informed investments.
Let me explain what I mean. For most companies, stock price moves up and down irregularly, based on current events, earnings reports, supply and demand, and dozens of other factors. But most stocks also show cyclical patterns – gains and losses that happen at roughly the same time each quarter or year.
For example, Booking Holdings Inc. has jumped in value for 11 straight years – always between July 1st and August 5th. That’s the kind of thing a great pattern trader can pick up on… and, with a little bit of good timing, turn into a money-doubling opportunity.
My friend and colleague, Tom Gentile, is one of the world’s best pattern traders, and this kind of thing is his bread and butter. He loves digging up these patterns. Mind you, this is far from an easy thing to do. It involves digging deep into a company’s history… plus plenty of high-level analysis from Tom and his team of researchers.
But the end result is pretty hard to argue with. The way he sees it is: if something happens every year at the same time, it’s probably going to happen again this year (and the next).
If your mom calls you every single year on your birthday, it’s pretty likely she’ll call you on the same date this year.
If your daffodils bloom every year at the beginning of April, you can probably count on seeing those blossoms this Easter.
And if a company’s stock gets a boost every year at the same time, you might just want to buy a few shares before it moves.
Using this logic, Tom and his subscribers managed to feature 23 money-doubling trades in 2019 alone. To tease that math out a little bit… they could have pocketed a potential $122,000 in profits, just by following Tom’s lead.
To celebrate the amazing year he had, Tom is hosting a special event. Normally, these “Profit Parties” are reserved for his subscribers – they’re an opportunity for his community to spread the joy after they’ve had some big wins. But this time is a little different.
Because this time, he’s opening up the invite list to each and every one of you. Last year was his best year yet, and he has good reason to believe that 2020 will be even better – so he wants to make sure that everyone, not just his existing subscribers, has the opportunity to make every day a “Profit Party.”
Until next time,