In this episode, I go through the most common goals that investors seek to achieve and teach you how to use the financial markets to achieve them.  Most investors will want to pursue several of these goals, with one being a higher priority than the others.  Traditional retirement, early retirement, income, capital preservation, and fun are very different goals that each require a unique approach to investing.

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(CC image by Al King on Flickr)

 

Section 1: Capital Appreciation for Traditional Retirement

Section 2: Capital Appreciation for Financial Independence or Early Retirement

  • Use retirement accounts, but you’re usually better off if you DO NOT max them out
  • Direct more capital towards alternative investments like: your own business, rental real estate, REITs
  • Use options to generate income, including more aggressive strategies
  • Be a more active investor – trade the intermediate-term cycles for extra profit potential

Section 3: Income

  • Appropriate for someone who already has reached, or is very close to, financial independence or retirement
  • Stock selection
  • Preferred stocks
  • Use options to generate income, but conservatively

Section 4: Capital Preservation

  • Laddered portfolio of bonds
  • Preferred stocks
  • Stock selection
  • Use options to limit downside and sell some upside

Section 5: Fun!

  • Futures, FOREX, small-cap stocks, day-trading, etc.
  • Anyone can have an aggressive trading account as long as the risk to the personal balance sheet is kept under control

 

Intro music by audionautix.com

Find more episodes of the Torpedo Trading Podcast at this link