Creating Your Own Financial Destiny
The following is adapted from Don’t Lose Your Money or Your Mind by Marjan Stojanovski.
Any type of downswing in the market makes investors nervous. The financial crisis of 2008 and 2009 was so big, however, that everyone was uptight about the market. Many were jobless, some people lost their homes, and investments of all kinds were seen as unstable. Even with the principals returned to every MITTS® holder, the changed economy revealed serious flaws in the investment program.
Still, the appeal of principal protection did not die with MITTS®.
Years after the financial crisis, banks are still trying to imitate the program by creating their own structured investment products, or principal-protected securities. Some will guarantee 95 percent of your principal with a 5 percent risk, others will guarantee your full principal at the end of the investment. If the market rises, though, investors will only see a small percentage of that market increase, rather than the full potential. This means that the market may rise 25 percent, but the investor’s contract stipulates that they only receive a 10 percent return.
These bank principal-protected products are simply imposters of the real thing — a true method of principal-protected investment in the stock market. Despite the flaws that caught up with the MITTS® program, Merrill Lynch was the first company to offer a way for people to invest, and know that they will see their complete principal at the end of the term, no matter what happened to the index value and their returns.
In this book, I’m offering you the chance to create your own destiny by replicating the results MITTS® investors experienced years ago, but without the market risks. No more relying on imposter bank products or second-guessing the stock market. I will show you how to make your own structured investment product that protects your principal investment. I’ll also show you what experts do to make the most of their investments. In addition to Steve Sjuggerud, pioneers like Dr. Van Tharp, Teeka Tiwari, and Dr. Richard Smith have laid the groundwork for my investment insight, and I will share their strategies with you.
At times, investing can feel like gambling. It’s fun when you’re up, but miserable when you lose. Investing is not a game, though. Losing your principal investment and your returns in the stock market is not only miserable, it can be life-altering. This book is not for the investors who are thrill-seekers, searching for the next big market trend. It is, however, for those who want to confidently invest and trust that they will never lose their principal investment due to market risk with their approach.
In every investment, it’s important to remember that there are several types of risks. Currency risk refers to phenomena like devaluation, inflation, and foreign exchange. Political risk factors in a government’s stability and rule of law, while credit risk deals with middlemen, agents, and the credibility of the issuer. When I use the term “risk free,” I am referring only to market risk, the type of risk dealing with price movement.
I’ll show you the strategies, but, as you will see, the first step is to recognize how our own minds often work against us. Have you ever found yourself making decisions based on only the most recent information, rather than everything you know about a situation? Maybe a stock’s price has been skyrocketing the last few weeks and you don’t want to miss out on what you see as a lucrative investment. You scoop it up without thinking twice, until it drops drastically and you wonder what went wrong. How could you lose on something that had been so profitable? Many investors fail to see the big picture because of a psychological tendency called “recency bias.” Others subconsciously mimic the investment behavior of the masses — both good and bad — because they figure that the majority cannot be wrong. This herd mentality is another type of cognitive bias prevalent among investors.
Our biases impact all of our decisions and behavior, not just the ones related to investing — this is why they’re so hard to recognize. We all hold mindsets and cognitive biases that make us vulnerable to the pitfalls in investing. Acknowledging them is hard, and changing our behavior is even harder. Without these mindset shifts, however, success in investing is nearly impossible.
You’ll recognize some of these biases in your family and friends. Others will feel all too familiar because they reflect your own mindset and behavior. Knowing how you think reveals how you invest, and this is the first step toward permanent success.
Believe it or not, the rest is easy. Principal protection can be simple and straightforward with the right portfolio. It can even be free of market risk when you follow the advice of experts who understand principal protection. First, though, you have to believe it’s possible. Where do you stand? Can you invest in the stock market and never lose?
To learn more about investing with confidence, you can find Don’t Lose Your Money or Your Mind on Amazon.
MARJAN STOJANOVSKI worked for the Customs Administration of the Republic of Macedonia as a computer engineer for sixteen years before leaving to pursue his passion for investment and trading. He gained his broker’s license with the Macedonian Security Exchange Commission in 2003, and earned a triple certification with the Chicago Mercantile Exchange. After practicing for eight years as an independent consultant, Marjan worked as both the general manager and chief portfolio manager for a major hedge fund. Now, once again an independent consultant, he applies his expertise in principal-protected investment strategies to establish stable, successful options for clients all over the world. Marjan lives in the Republic of North Macedonia with his wife and son.
