Robert Ross - A Beginners Guide to High-Risk, High-Reward Investing: From Cryptocurrencies and Short Selling to SPACs and NFTs, an Essential Guide to the Next Big Investment

A Beginners Guide to High-Risk, High-Reward Investing

From Cryptocurrencies and Short Selling to SPACs and NFTs, an Essential Guide to the Next Big Investment

Robert Ross

Founder of TikStocks

Dedication

To my parents, Pat and Terry Ross, who taught me the value of money and negotiating from an early age on the streets of New York City. While I still use these valuable lessons today, even more important was that they showed me how to work with the same tenacity I play.

When you hear the phrase high-risk, high-reward investing, you likely think of hedge fund managers striking it rich on complex investment strategies. These cutthroat, super-rich members of the investing community use their superior intellects to see where the price of a stock is headed before anyone else. And as an individual investor, theres no way you could possibly replicate these strategies, right?

Wrong! This view couldnt be further from the truth. Technology has leveled the playing field, and now you can use many of the same strategies that top-notch hedge funds have at their disposal. And as renowned investor Peter Lynch wrote in his seminal work One Up on Wall Street, many individual investors can pick investments just as well as the average Wall Street expert.

There is one thing that separates Wall Street traders from individual investors: an ability to assess risk. As Im going to teach you, the better you get at managing risk, the higher the investment returns you can reap. In this book, youll learn how to use high-risk, high-reward investment strategies safely and effectively. Ive culled all the key information, useful market indicators, and tips for avoiding losses that Ive gleaned from my years of experience as a professional stock analyst and educator. Youll discover the inner workings of high-risk investments, determine when to buy and sell, andif all goes to planwatch your profits grow.

A few of the thirty topics that well cover are:

• Cryptocurrencies
• High-growth stocks
• Call and put options
• Special purpose acquisition companies (SPACs)
• Meme stocks
• Leveraged exchange-traded funds (ETFs)
• Double-digit dividend-paying stocks
• Futures trading
• Non-fungible tokens (NFTs)

Even if youre willing to start using high-risk investing strategies right away, I urge you to take your time to learn these strategies thoroughly before investing real money. I also recommend starting small. The entire purpose of using high-risk, high-reward strategies is to take a small amount of money and generate a large return. Betting too much money on a high-risk strategy is a mistake that many beginners make, and I dont want that to happen to you. That is why I mention the importance of controlling risk in every chapter.

To help you manage the associated risks, each chapter includes detailed examples showing you step-by-step how to employ these high-risk investment strategies. They will include stories about how investors have won (and lost!) on some of these high-risk trades.

The goal of A Beginners Guide to High-Risk, High-Reward Investing is to teach you how to use these high-risk investment strategies responsibly so that you can achieve your short- and long-term investment goals. Lets get started!

In most investing books, a grizzled Wall Street veteran extols the benefits of buying S&P 500 index funds, holding them for 40 years, and retiring with a few million bucks in the bank. The salt and pepperhaired old-timer then expounds on the virtues of holding gold stocks before bragging about how his all-weather stock-picking system will help you retire early.

And at some pointwithout failhell mention that if you bought $5,000 of Amazon stock 20 years ago, youd have enough cash now to buy a beach house.

Of course, buying and holding index funds over many years is a great way to build wealth in the stock market. As a millennial with many years left in my investing journey, I employ this approach with nearly half my portfolio. But you didnt buy this book to learn about the merits of index funds. As the title states, this is a book on high-risk, high-reward investment strategies.

Im here to show you how to trade short squeezes like GameStop (GME) and discover cryptocurrencies that can surge 300% in a matter of days. Do you like dividend-paying stocks? Ill show you the best way to find double-digit dividend payers that will pay for themselves in a few short years. And if youre tired of financial talking heads telling you how much you couldve made by buying Amazon 20 years ago, rest assured: My plan is to show you how to find the next Amazon.

But most importantly, Im going to give you step-by-step instructions on how to use these high-risk strategies safely so you can try to avoid losing a lot of money.

At its core, risk is a study of uncertainty . Its our attempt to figure out what the actual return on an investment will be compared to whats expected. The better you are at assessing risk, the better youll be as an investor.

Ive been a stock analyst for the better part of a decade. During this time, Ive had the pleasure of learning from some of the worlds best and brightest financial minds, including John Mauldin, Felix Zulauf, and Jared Dillian (many of these experts will make appearances later in this book).

Ive also spent a lot of time talking to individual investors, mainly through direct messages on my popular social media channels. And if theres one thing Ive learned, its that new investors are terrible at assessing risk. Thats why risk assessment is a major focus of this book.

Every person reading this book has likely made a risk assessment today. For instance, lets say that youre driving down a busy street during rush hour. Youre running late for an important meeting, so youre trying to barrel through the upcoming intersection quickly. As you approach the bustling four-way intersection, you notice that the streetlight just turned from green to yellow. And in a few seconds, you know that light will flip to red.

What would you do in this situation? Your decision comes back to how comfortable you are with risk.

If you are a risk-averse driver, you would slow down and stop at the yellow-turning-red light. You would then wait for the light to turn green again and be on your way. While youve avoided a potential $75 red-light ticket, you will be late for your meeting.

Not everyone would respond that way. Lets say the driver in front of you decides to go through the yellow light. At that moment, you decide to increase your speed. You know that theres a chance you could get caught by the red-light camera, but your risk-reward calculation tells you that its worth that risk to get to your meeting on time.

Investors make these same risk-reward calculations every day, although the options are less clear-cut than in the red-light example. For instance, lets say our driver is sitting at their desk later that day. They just received their paycheck for the month, and as usual they take $500 of that check and add it to their brokerage account.

Unlike the red-light example where there were only two optionsstop or speed through the lightthe person now has nearly unlimited options to consider. The most risk-averse investor would take that $500 and buy something ultra-safe, like US government bonds yielding around 1% or 2% per year. A slightly less risk-averse investor would buy something with tangible value, like gold, orif theyre feeling bolda blue-chip dividend-paying stock such as International Business Machines (IBM) that may return 8% per year.