The Investor's Playbook

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Do you want to invest like the pros?

Then you need to know The Investor’s Playbook.

Today, we’re going to cover these 6 investment strategies:

1. Value Investing

2. Tax-Loss Harvesting

3. Options Trading

4. Small-Cap Investing

5. Dollar-Cost Averaging

6. Dividend Investing

Let’s get into it.

1. Value Investing

The primary investment strategy used by Warren Buffet himself.

Value investing looks for companies with solid fundamentals and unrealized growth potential.

You find the hidden gems that are unrecognized and undervalued by the market.

The idea being that, in the long term, the price will catch up with the value of the company and provide you with fantastic returns.

2. Tax-Loss Harvesting

This strategy relies on realizing losses on underperforming assets to reduce your tax liabilities.

These losses are used to offset capital gains taxes on your profitable investments, thereby maximizing your returns.

Example:

You sell your TLSA position and take a $10K profit and we’ll use the max short-term gains tax of 37%.

You’d owe $3.7K in taxes, but if you lost $4K on another stock and sold it to realize the loss, it would cancel the taxes owed on your TSLA gains and cover your loss.

3. Options Trading

Options are financial derivatives that give you the right to buy or sell something at a set price by a specified date.

The fixed price allows you to take out a short or long position against the asset based on how you think the market will move in that time.

This is how Michael Burry shorted the housing market during the GFC.

He bet against the subprime mortgage market with credit default swaps on mortgage-backed securities.

This is a leveraged play, which can lead to outsized gains or getting completely wrecked. Investor beware.

4. Small-Cap Investing

Smaller companies with a market cap of around $2 billion or less are considered “small-cap.”

Investing in small-cap companies provides a higher potential for growth and are more likely to be mispriced by the market, which means more opportunity for you.

As always, with more potential reward, there are also higher risks.

Small-cap companies are generally more volatile, have lower trading volume and run the risk of going belly up.

5. Dollar-Cost Averaging

With this strategy, you invest a fixed dollar amount at a predetermined interval regardless of price fluctuations.

For example, you buy $500 of TLSA on the first day of every month.

No matter what the stock is doing that day, you click buy.

This is a strategy used to mitigate price volatility as the fixed interval averages out the stock price over time.

6. Dividend Investing

In dividend investing, you put your money in stable companies with a track record of paying high dividends to their investors.

This is another favorite approach of Warren Buffett.

He famously praises Coca-Cola (KK) for the dividend yields they provide Berkshire Hathaway every year.

In 2022, Berkshire Hathaway held 400,000,000 shares of KK and received a $704 million dividend payout!

This strategy emphasizes stability and risk management.

So there you have it!

6 of the key plays used by professional investors.

This gives you a solid idea of some of the trading techniques that are out there, but there are many more.

I encourage you to do further research to determine which strategies are the right ones for you and your financial goals.

Now, let’s get investing!

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