Life is a gamble

Hey what’s up. My name is Jeff Tiefenthaler and I’m here to talk to you a little bit about my company and what it is I do. I started my company Trading Tech and Consulting LLC with a desire to develop trading software and help other traders outperform the market. Most of my work time is spent trading but I do occasionally like to write. I’ve been waiting to publish this article and I figured it’s about time. I’ve titled it “Life is a gamble” and I’ll leave to you to decide if you agree.

What do I mean by life is a gamble? First let me tell you what I don’t mean. I’m not referring to the kind of gamble you take when pulling on a slot machine lever at the casino. What I’m saying is life is a gamble in the same way that every decision you face, every choice you make, every turn you take has an opportunity cost associate with it. An opportunity cost is what you forfeit after you’ve made a decision, that also includes indecisiveness. Life is a gamble is like saying each choice you make is sacrificing one possibility in return for another possibility without knowing the future outcome of your choice. Unless you can predict the future (which I know we traders think we can!) every time you make a decision you forfeit some other possibility. For example, the money you used to buy a new car means you might not be able to take that trip to Cancun this year. Your time consuming job means you miss your kids baseball games during the week.  Pursing a degree in finance means putting off pursuing a degree in engineering. The result of having competing desires, and then choosing one of multiple options means that the future outcome of your decision MIGHT not have been the correct choice (or “better” choice). Therefore, life is full of risks, rewards, and opportunity costs and this is why life is a gamble!

For me, when I was in my early teens I learned that one of the biggest gambles in life is how you manage your finances. I’m not a financial advisory so I’m not going to tell you what you should do, but I do know how to make financial decisions that have led to greater wealth and I’m happy to share some of those with you. I’m also a testimony on how bad decisions or not making any decision has led me to misfortune. My belief I’m here to promote is that investing and trading is a way to grow your wealth and maybe more importantly as a way to make better financial decisions. Part of what I’m talking about is intelligent speculation but that’s for another blog post.

Did you know…

…According to a Gallup survey, in 2007, 65% of U.S. adults were invested in the stock market. In 2017, that percentage was down to 17%. Why did so many people leave? What happened? To be honest it doesn’t really matter because it’s in the past but certainly the recession caused by a mortgage crisis didn’t help. And there have been plenty of other “scary” events along the way that have caused people to leave. I guess people decided that the money they had made or lost was more important than the opportunity to make it back or more! The outcome of those decision probably hasn’t helped their financial growth, at least not in the stock market, because since 2008 the market has recaptured pre-crisis losses and gained almost 100% since the end of 2007! Just look at this chart with 2007 circled in red.

SPY_2007bear

Now, I’m not here to promote putting all your money into the stock market . In fact, if you were one of the lucky ones who held through the crisis of 2007 maybe you are consider taking some chips off the table? Doesn’t really matter. What I am here to promote is how you can become a market participant, learning the art of intelligent speculation, actively managing your money and understanding how the market works, all with the goal of beating average market returns. Admittedly, I don’t know everything and there’s a lot left for me to learn. What I can say with confidence is that my experience has enabled me to be a full-time trader and money manager beating the average market index returns over the past decade.

Upwards and onward!

Jeffrey Tiefenthaler

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