≈ A conversation with a friend. ≈
This friend of mine knows I’m a trader. She has this money, not huge amounts, although not too shabby, either. She lives in Northeast Italy, I live in the Northwest. We have almost the same background in life, kids at the same age and we are about the same age as well. I wish this conversation had happened live, preferably with wine, but it didn’t. Via Whatsapp with no alcohol was how it went.
— So, what’s your struggle?
— We have this money and we wanted it to grow.
— Where is it?
— In the bank doing nothing there.
— I see. What are your goals?
— Just to make it grow. But I don’t want to lose! I’m terrified of losing anything.
— Losing you already are, you see. The Eurozone is not growing, the Euro is not in good shape and inflation in Italy peaked at 1.7% last year. Interest rates are at the zero mark and there is a default risk in the foreseeable future. Have you ever thought about opening an account in the US?
(panic sets in)
— IS IT LEGAL??
— But I don’t want to lose.
— Losing you already are, I told you. Take ≈ 2% of your money every year. This is more or less how much you are already losing. If the situation degenerates you can add more to that loss.
Then, the conversation proceeded. In short:
- She wants returns.
- She does not want to lose.
- She is already losing.
- Neither she nor her husband has stomach or time to take care of it.
So we are in this place. No time, no stomach, no return, full risk. She wants the omelet but is afraid of breaking the eggs. Meanwhile, the eggs deteriorate in the refrigerator.
Chart of the Day
The power of inflation
Inflation is an invisible tax. “My money is in the bank doing nothing. At least I am not losing anything.”
Yes, you are. The graph above simulates a 2% annual corrosion in the purchasing power of your hard earned money.
“She needs the omelet but is afraid of breaking the eggs. Meanwhile, the eggs deteriorate in the refrigerator.”
Video of the day
How to Use Put Options as Insurance
Coach Noah explains what a Put Option is, how to and why you should use it as insurance.
Today’s line up
Traders Lounge 11PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.