Today is December 3, 2021 and, well, the public markets went absolutely apeshit. I opened up my Robinhood account and saw red across the board. And not just a little red. All the red.
As always, the next thing I did was open Twitter to see what the word on the street was and I came across this tweet from Chris Sacca.
This tweet made me think about certain rules for investing that I set for myself to prevent me from crawling into a hole when times like this arise.
Here Are My 5 Simple Rules for Public Market Investing
1. Know what you’re good at.
This rule stems from something Jason Calacanis once told me. He said, “instead of spending so much time trading, just open up a damn AI investment account on Wealthfront and focus on building your career while your long term growth occurs in the background.”
You know what? He was absolutely fucking right. I’m not a great public investor. I don’t conduct the analysis required for fantastic public market trading to make an absolute killing at it. So I did exactly what he said to do.
I opened up several investment accounts for passive investment and let my investment grow without having to manage the day-to-day. Here are the public market apps I use for investing currently.
– Robinhood (because I do like to get dangerous now and again)
While the rest of the world is panicking because they now owe money they don’t have due to a market crash, I’m still dollar cost averaging my way into a ~17% ARR portfolio (fun fact, the average ARR on the S&P 500 is 10%, so I think I’m doing just fine).
*none of the links above are ads, I’m sharing because they kick ass, not for a kickback.
2. Don’t invest money you can’t afford to lose.
I only invest what I’m comfortable with losing. I don’t bet the farm and put my family at risk on stock investing. Sure, call me a wuss or whatever. But I want to get wealthy and be able to sleep at night without panic attacks. Currently, I have a great career, I’m making good money investing, and I sleep just damn fine.
Don’t get wild. Think practical. Think tactical
3. Don’t borrow money to invest.
If you invest on margin, you’re going to lose at some point. It’s just a matter of when. If you can’t use your own money to play, then get the hell out now. Most day traders actually lose money over time. Only play with your own chip stack.
4. Diversify your portfolio.
Personally, I believe in tracking various sectors and placing my money in companies I think will win across the board. I don’t go all in on Apple or just place all bets on the car industry. I diversify investment sectors, while also investing in bonds, indexes, emerging markets, and alternative assets.
Apps like Wealthfront will help you with safe diversification.
For alternative assets, I really dig using tools like Yieldstreet and Fundrise for dividend yielding investments that focus on additional return categories like art, real-estate, and fund loans.
5. Focus on the long term – be a value-add investor, not a short seller.
When you invest, think about 5 – 10 – 15 – 20 years from now. The markets go up and go down, but traditionally, they always go up. So don’t let the red of today blind you from the green of tomorrow. Focus on long-term growth and you’ll be better off in the end run.
Be a value investor.
And in the spirit of thinking long-term, BUY THE DIP DAMMIT.
Okay, I know those were short and simple tips, but if you’re like me, they’ll come in handy. I’m not a professional stock trader. But I want to invest and build wealth while also making a killing in my career and building a name for myself.
By adhering to the rules listed above, I’ll come out on top.
Peace, love, and punk rock.