Pro Traders: how do you invest your money?
- Thread starter 6ptPrime
- Start date
I hear ya. The first thing is to get as much money out of trading and into what us traders call "safe" investments like the stock and bond market. When I was trading for a living 50% of my balance over and above what I needed to trade was withdrawn and 50% of that went into the Vanguard S&P 500 fund. So everything was growing little by little, both my trading account and my investment account. I'm use to 30% drawdowns so investing is a piece of cake, safe as milk.
No matter what they tell you, everybody ends up about like the index. Anything other than index investing requires getting your hands dirty. Withdraw it, ship it to vanguard and check it once a year on your birthday. That's what I do.
I agree, I don't think amatuers should trade stocks unless they can spend hours each day studying balance sheets. In the end, everybody ends up about like the index.
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Why do you think OP is worth less than 2m ?
Anyway if you run a risky trading strategy (with a not insignificant rik of ruin) it's better not to put all your funds into it.
Ending up in one's late thirties broke with wife and kid seems quite nightmarish, I wouldn't want to deal with such a threat while trading.
But using high leverage in the trading account while keeping cash invested elsewhere is an alternative (I suspect used by many traders and considering OP is trading future he's probably using quite a bit of leverage), one needs to keep some of those investments liquid enough to be able to top up the trading account in case of severe loss, if one still wishes to trade after that.
well said, my trading strategy certainly has a limited life span, with risk of ruin always right around the corner. It's sort of like being in a bar band and recording one hit song which puts you on tour but you know it won't last. There's a lot of quick money in trading, but it's not something to rely on for your old age. Some buy cars and coke and girls, I just bought a little pot and some mutual funds.
no,no,no,no...That is my only cardinal rule. Once it leaves the trading account and goes into the retirement account it can never be reclaimed. If you are blowing up, cut your hair and go get a job. no...never under any circumstance go back to your savings to replenish a bad losing streak in the trading. You can always just reduce size or increase time, but don't ever re pledge your hard earned profits which are "safely" invested (if you want to call the stock market safe) to trading.
Weathfront and real estate
Here's my take...
I have an account that I still use for trading and running my structures. I have a set amount that I want in that account to run things and I keep it in that general range.
I have a cash reserve account that would serve to "re-fund" the main account in the event of a blowout or other unforeseen catastrophic event. My current strategies don't really lend themselves to blowouts any more, but you never know. You always need some dry powder and no one can predict what will happen in the markets or with brokers.
Beyond that I like to have investments that can yield about 5% that are as safe as I can make them. Even if you can pay cash for a large residence, get a note on the last 1M and pay 3-4% on it, which is really much less after the interest deduction.
If that "5% pot" gets crazy big...or even if you are so inclined...I'd also consider a charitable foundation...doing good with nice writeoffs.
I have an account that I still use for trading and running my structures. I have a set amount that I want in that account to run things and I keep it in that general range.
I have a cash reserve account that would serve to "re-fund" the main account in the event of a blowout or other unforeseen catastrophic event. My current strategies don't really lend themselves to blowouts any more, but you never know. You always need some dry powder and no one can predict what will happen in the markets or with brokers.
Beyond that I like to have investments that can yield about 5% that are as safe as I can make them. Even if you can pay cash for a large residence, get a note on the last 1M and pay 3-4% on it, which is really much less after the interest deduction.
If that "5% pot" gets crazy big...or even if you are so inclined...I'd also consider a charitable foundation...doing good with nice writeoffs.