What To Do With a New $5,000 Account?

What To Do With a New $5,000 Account?

July 8, 2024

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As it turns out, I’ve got a little change in my pocket in the form of a new account.

It’s definitely going jingle-lingle-a-lingle.

And I want to get it going immediately.

So, what should I do?

In my mind, there are several prominent options.

One–the easiest one–would be to make it an equities account and use high-leveraged ETFs.

I could put $500 into each of these and let it rip:

Any problems with that?

Aside from the fact that index funders just jumped off a bridge, these are all stupid. They’re highly-leveraged bets on individual stocks. No diversification. No sanity.

But how has this portfolio done since I started tracking it in March 2024?

It’s absolutely killed the market:

It’s 3x higher than SPY over this period.

Is the market going to crash? Probably.

Will these stocks go down considerably in a Bear Market? Definitely yes.

Are these overbought? Almost certainly.

Will it beat the market by a country mile over time? I’m guessing it will.

Time will tell.

But since we’re on equities, could I do something more reasonable instead?

Yes.

I could use a couple of high-leveraged ETFs and mix it with a solid, market-beating stock.

Here’s TQQQ, SPXL, and MCD (McDonald’s) in equal amounts since 2020:

It beats the market by a lot but it also suffers a lot more drawdown.

Of the two, I’d be more willing to go with the 10 crazy ETFs. I’m looking to grow this new account and that looks more promising.

But, if I have a choice, I’d always rather use a trading system.

Could a system be a better way to go?

We’ll take a look in the upcoming Newsletters.

 

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.