Insights of a noob:
10 things I've learned from 18 months in the financial services industry.
👇🧵
Negative compounding is a thing, it occurs from the buildup of fees and taxes over time (there is a link to an article which explains this in more detail in point 9).
@MavenAdviser summed it up perfectly in a recent podcast, 'financial success takes place between your ears, not on a computer screen'.
Over the long term markets do not lose money, however investors do.
A study found that over a 20 year period ‘the average investment return was 11.81%. The average investor return was 4.48%.’
You are not god's gift.
You can't predict the future.
Market timing is futile.
Day trading may sound exciting and you may feel like the Wolf of Wall Street - most of the time you are just mugging yourself off.
If you want to have an extra focus on a particular asset/market, dabble in that on the side, do not make it the centre of your portfolio (if you are unsure why, see point 4).
It may be the worst possible decision an investor can ever make, potentially wiping out a huge chunk of their net worth in one go.
Take a breath, step back and THINK.
If you are going to buy back in when the markets start to rise again, then YOU have acknowledged that it is just a TEMPORARY decline!
DON’T DO IT!
Learn the difference between volatility and risk and you will soon realise that the real risk is not being in the market.
This rings especially true for the financial media.
Sensationalist writing sells - unfortunately level headed, evidence based commentary does not. Learn to tune out the noise and crack on.
Spend less than you earn.
Pay yourself first.
Keep a close eye on fees and tax.
It drives home the importance of your savings rate and the impact of negative compounding (touched upon in point 2).
https://t.co/d30XxFjsWu
More from Finance
As the DeFi bull market continues, some brutally honest tips for new founders fundraising in crypto.
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1/ The discount you offer to strategic investors is both to account for the risk of an unlaunched product, but also as compensation for continued value add and support.
So make sure you know the investor will support you and not leave you on read once the docs are signed!
2/ Having someone on your cap table/ token allocation is as important as hiring.
You wouldn't hire someone just because they are influencers on Twitter- you do your reference checks and find evidence of value add from other companies the investor has invested in.
3/ Don't trust, verify.
Many investors will promise you the world when they're trying to get on your cap table.
Talk to founders they backed to see how much of it is bullshit. Ask them about how the investor was there for them during hard times.
4/ Don't just go for "name brand" funds because you want the brand.
Sure, it's great validation, but optimize for fit, not vanity.
However, I do think many well-known VCs are good actors, especially those with roots in successful trad VCs. They have a rep for a reason!
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Equity/ownership is a force. Getting it in the hands of the right people generously will drive alignment and execution.
— Joey Santoro (@Joey__Santoro) January 21, 2021
It is a joyful and serious responsibility \U0001f332
1/ The discount you offer to strategic investors is both to account for the risk of an unlaunched product, but also as compensation for continued value add and support.
So make sure you know the investor will support you and not leave you on read once the docs are signed!
2/ Having someone on your cap table/ token allocation is as important as hiring.
You wouldn't hire someone just because they are influencers on Twitter- you do your reference checks and find evidence of value add from other companies the investor has invested in.
3/ Don't trust, verify.
Many investors will promise you the world when they're trying to get on your cap table.
Talk to founders they backed to see how much of it is bullshit. Ask them about how the investor was there for them during hard times.
4/ Don't just go for "name brand" funds because you want the brand.
Sure, it's great validation, but optimize for fit, not vanity.
However, I do think many well-known VCs are good actors, especially those with roots in successful trad VCs. They have a rep for a reason!
You May Also Like
12 TRADING SETUPS which experts are using.
These setups I found from the following 4 accounts:
1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4. @DillikiBiili
Share for the benefit of everyone.
Here are the setups from @Pathik_Trader Sir first.
1. Open Drive (Intraday Setup explained)
Bactesting results of Open Drive
2. Two Price Action setups to get good long side trade for intraday.
1. PDC Acts as Support
2. PDH Acts as
Example of PDC/PDH Setup given
These setups I found from the following 4 accounts:
1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4. @DillikiBiili
Share for the benefit of everyone.
Here are the setups from @Pathik_Trader Sir first.
1. Open Drive (Intraday Setup explained)
#OpenDrive#intradaySetup
— Pathik (@Pathik_Trader) April 16, 2019
Sharing one high probability trending setup for intraday.
Few conditions needs to be met
1. Opening should be above/below previous day high/low for buy/sell setup.
2. Open=low (for buy)
Open=high (for sell)
(1/n)
Bactesting results of Open Drive
Already explained strategy of #opendrive
— Pathik (@Pathik_Trader) May 27, 2020
Backtested results in 30 stocks and nifty, banknifty.
Success ratio : approx 40-45%
RR average 1:2
Entry as per strategy
Stoploss = Open level
Exit 3:15 PM Or SL
39 months 14 months -ve, 25 +ve
Yearly all 4 years +ve performance. pic.twitter.com/nGqhzMKGVy
2. Two Price Action setups to get good long side trade for intraday.
1. PDC Acts as Support
2. PDH Acts as
So today we will discuss two more price action setups to get good long side trade for intraday.
— Pathik (@Pathik_Trader) June 20, 2020
1. PDC Acts as Support
2. PDH Acts as Support
Example of PDC/PDH Setup given
#nifty
— Pathik (@Pathik_Trader) June 23, 2020
This is how it created long setup by taking support at PDC.
hopefully shared setup on last weekend helped. pic.twitter.com/2mduSUpMn5
