By Dr. Harry Hamann (MBA)

Learn How To Invest - The Ultimate FREE Guide to get Financial Success

Are you serious about to Learn How To Invest and get Financial Success? Then click the Image above to get access to Mastering Investments - an online video course that covers everything to confidently invest successfully and to generate profits.


Welcome!

Congrats! You found this guide. It will be incredibly helpful to you if you want to LEARN HOW TO INVEST and get financial success.


1. Introduction, Motivation and Goal Setting

My Story

First, let me share a little story about myself. My name, is Harry Hamann, I am a private investor and CEO of H2 Intel. I was born in Germany but I now live in Cyprus - an islands in the Mediterranean. It is beautiful and all the sunshine definitely lifts up the mood.

I was a normal engineering employee in the German automotive industry - totally unrelated to finance. How come that I am writing now a blog about how to learn to invest? In my last job, I was not really happy or fulfilled. I asked myself. Why am I on this world? Is the 9-5 my outlook for the rest of my life? The thought of me at my death bed, regretting not trying, not pursuing my passion was too much. I could not take it. I had to do something about it. I wanted to change. I needed to change.

I was always interested in finance, especially about investing. Stocks, Bonds, Real Estate, all of it. I started to read books about investing, then tried to learn online through specialized investing courses, and made my first investments. I easily spent more than $25.000 just to learn and improve over the years. All of the courses were great but they just did not teach the basics in a holistic way. Ok, so I saved, invested more in the markets (initially stocks).

I made some money, lost some money. Going nowhere. I increased my savings rate, tried to live like a monk, invested everything I could. Some of it into highly speculative commodity stocks, some into new asset classes (crypto assets). My portfolio was going up. Within a relatively short period of time I made $200K. I thought I was a genius. My portfolio will be going up forever. Then it suddenly went down - hard! I was paralyzed, did not know what do.

I lost the whole $200K and then some. I was in shock. Did I really just lose all of that money? I did. I could not look myself in the mirror. I felt sick. Should I just give up? After some months, I decided I could not quit. I learned so much, I went through much pain, just to stop now? No. I kept going. Learned more, invested more, failed more. I just kept going.

Then, my portfolio stabilized, I was getting consistent returns, actually amazing returns. Almost all of my capital was made from investment profits. I now invest my capital full-time. Moved to Cyprus. Enjoying my life! But friends and family saw my success and kept asking, Harry how did you do it? Show me! I thought long about it, then realized why not share it? Give value, receive value. In some shape of form. Moreover, I thought, why in the hell is there no holistic course about investing out there? I needed that myself at the start!! So, I created Mastering Investments. It is holistic online video course about how to learn how to invest. It covers all asset classes: public stocks, private equity (angel investing), real estate, crypto assets, commodities, precious metals, bonds, currencies, and also derivatives (like CFDs, options).

About this guide - For you to Learn to Invest

The guide you are reading now about how to learn how to invest and get financial succcess, follows the structure of Mastering Investments. It is the brief version of it. Trust me, there is a lot of value, even though I can not share everything - otherwise my paying clients will call me angrily. This guide teaches you my know-how and my system. It is the result of much pain and tears, lost money.

I hope you appreciate it. It will teach you investing from a practicioner point of view. From someone that made millions with investing.

It is not theory, it is applied practice, it works - for me and also for my clients.

My motivation is to empower you, the private investor, with real know-how. Hopefully, this guide will help you

protect your hard earned capital and helps you to generate lots of profits. It will advance your learning

curve dramatically. It is know-how and system I hoped I had at the beginning.

Most people think, only professionals are able to invest properly. Let me tell you, most professional do not know shit. I beat most of them, by far. Never let anyone tell you, you can't do it. Especially investing is something that can be taught. To anyone, regardless of their background, capital, or the time you have. You can easily get started with investing, just with simple math, with little capital and with little time spent (in parallel to your job, if you have one).

Investing: Why Do-it-Yourself?

There are a few reasons.

  • Conflict of interest: asset managers charge high fees that leads to lower returns for you
  • Underperformance: most professionals can not even beat the index
  • Picking a great investment manager is as difficult as picking your investments
  • You can take control of your life
  • If you don't invest, in todays world, you are doing it wrong. Inflation (and hidden taxation) will erode the purchasing power of your hard-earned capital. As investors, we want to protect purchasing power and grow it!

Learn How To Invest: Goals and Meaning

Everyone has different goals. If you are reading this, I know you want financial success. It usually is just a tool though, to get something more. Wealth, Health, Love, Happiness. More money certainly helps to get out of the rat race or to live a more relaxed live, on your terms. It leads to Freedom.

Think about your goals for a second. What are they? List them. Rank them. Pick the most important goals. What financial goal do you have? How much capital is that? Pick a number that leads to financial freedom for you. I think a good guideline is $1M (1 million). It is good to have big goals. The question is, what are you going to do about it? This is why meaning behind the goal is important.

If you clarify the why for you, the meaning behind your goal, you will apply and execute much better. Knowing (having a plan) is good, doing is more important though. Without the doing, you will not advance further. One more thing: where focus goes, energy flows (Tony Robbins). You can not do 100 things at the same time and expect great results. So, if you decide to learn how to invest and get financial success. Focus on it, go after it, achieve it.

One last thought: break down your goals in smaller chunks, otherwise it hard to execute. It is much easier to have a big goal, but just think about the smaller subgoal. You will reach the big goal more easier that way.




2. Understanding and Managing Personal Finances

The Cashflow Quadrant

The basics of personal finance is this: where is your income and cash coming from? The concept of the cashflow quadrant comes from Robert Kiyosaki, the Author of Rich Dad, Poor Dad. You see the four quadrants in the image below.

The left side (employee E and self-employed S) are exchanging their time for money. This means, without them working they do not earn money. Now lets look at the right side. The business owner B, and the investor I, are not exchanging their time for money. They are doing something different. They are using people (or systems) to generate cash. The investor uses money itself to make more money.

It does not matter where you are in the quadrant right know. The important thing is to integrate the right quadrants into your life. What do I mean? Let us say you are an employee or self-employed. In parallel to your job or small business, you still can try to establish yourself on the right side. You can start a side hustle with systems that will earn you additional income. Or you can use your existing money for investments. That way, you are capital can grow over time. Where are the rich on the cashflow quadrant? They are on the right side. If you want financial success, you must pursue the right side. My expertise is investing. This guide will help you with that.

Income Streams

Income is very important. Try to create multiple income streams to diversify and reduce your dependence on income streams. If one income stream dies, you have another one to pay for your living cost. This is the idea. It takes time but it should be a long-term goal.

Increase Income

If you want to succeed financially, you must generate more income over time. Here are some ideas for you to generate more income. Negotiate a higher salary with your employer. Change the employer for a higher salary. Maybe even change your job function for a higher salary. Alternatively, create side hustle (small online business). Alternatively, save money from your job, invest it in the markets. This guide will show you how. That way you increase income from dividends, interest (cashflow income) or capital gains (income from the appreciation of your assets).

Just as teaser. This is how many years it takes to get to 1 Million USD with Investing. There are three scenarios (little/medium/higher capital and income). It definitely shows that you do not need much income or capital to get financially free with investing. It is just a matter of time. The number of years it takes to get to $1M reduces if you get superior investing returns (Compounded Annual Growth Rate: CAGR).

With more know-how and a clear system, anyone can achieve above average returns! Me and my clients prove it!

You just need a couple of years with above average returns and you can build real wealth relatively fast! It is possible!

You think high returns are impossible for at least a couple of years? Just look at the great investors! They can do it for decades!!

You think you need a lot of capital? No, just asymmetric investing ideas. I will leave you with this chart and then lets continue.

Decrease Cost

Income is one side of the equation. Cost is the other. You you want to decrease your cost. That way, you will have more investable capital. More investable capital means your wealth will grow much faster.

Your main costs are living cost and tax cost. Track your expenses, make a quick list with some categories and identify costs that are unnecessary. If you want to succeed financially, you must live modestly first. Get rid of fancy cars, luxury items and so on. Focus on the things you really need to live (food, basic apartment, etc). I know it is tough, but living minimalistically for a while also has advantages. I felt more freedom, less things bothering me, less clutter in my head, I felt more light. Look at the bright side. Tax is the other cost, get a good tax adivsors (that will help you reduce tax massively). Otherwise, learn it yourself. There are always creative, legal ways to reduce tax. Optimize it. All the rich people are doing the same. If you are not location dependent, you can quickly build company structures and move to tax friendly jurisdictions. It makes a big difference in reducing cost.

Income must be higher than Expenses

Never spent more than you earn. Do not take any loans, except in the case for high quality real estate. This is the most important rule of financial success. Even celebrities earning millions per year, do not get this rule right sometimes. And they go broke. It is just simple math. Do not make this mistakes. You do not just want to have a higher income than expenses, you want the income to be much higher than your expenses. Try to increase the difference between income and expenses as much as you can. You will have much more capital.

Your wealth will grow much, much faster if you invest. Use this tool to see how fast your capital can grow. Live a couple of years like others won't, so you can live later a life that other's can't. It will pay off more than you can imagine. It can also come much sooner than you can imagine. Have patience and trust in yourself.

In summary, increase income, decrease cost, invest the difference in high quality assets and your capital will grow massively with investing over time. The following infographic shows how powerful investing can be.

Build your own Infrastructure

Personal Fiance, Investing, your Pension, your health care. Take control of your life. Build your own infrastructure. You might not get a pension income or no pension at all (pension crisis, age demographics, low returns). Build your own personal pension, away from government control. If times get tough, you are taken care of that way. Regarding health care: government health insurance might only pay for the essentials or reduce coverage substantially. Build capital as a reserve to access high quality health care when really needed. The point is this: only you care most about you. No one else cares that much. Build your own infrastructure, do not be dependent on other people when it comes to finances.




3. Understanding and Managing Taxes

Total Tax Burden

Most people know personal income tax. The tax you pay from the income of your job. This is one tax. Trust me, there so many taxes (a lot hidden), that the total tax bill is much, much higher. Examples are value added tax on the consumption of goods and services. Inflation which is hidden tax that can be 2-5%, sometimes even 10% for a couple of years. There are other special consumption taxes, for example on fuel. Your investments are taxed too, your propery as well. This is not the total tax list. The point is, if you add up all of the taxes, you easily reach a effective total tax rate of around 63%. Personal income tax might be 45%. A total tax rate of 63% means, you work 100%, the government get two-thirds of your income, and one third is for you. This is criminal. Taxation is not bad in itself, but the state could serve its citizens very well with a much lower total tax rate (10-15%).

Tax Minimization Strategy

You remember the cashflow quadrant? While employees are taxed at 45% (I know, all of this depends on juridiction and a lot of other factors, it is a simplification here), business owners might only be taxed at 30% or lower.

This means, the business owner has a lot more after-tax income that the employee. This means, the purchasing power of the business owner is higher at the same salary when compared to the employee. The wealth of the business owner can also rise much more quickly, because he has more capital available. The investor can have an even lower tax rate of 20% or less. Money is taxed much less, the the work of a human. If the investor moves to a tax friendly juristdiction, he can even reduce taxes to 5% or less. Now, this is a massive tax advantage! That is what major businesses, rich people and investors are doing! Taxes can always be optimized, even if you are an employee in a high-tax jurisdiction.


4. Understanding Money and the Banking System

Definition of Money

  • Hardness - resistance to unpredictable supply increases and debasements of value
  • Fungibility - units are interchangable and indistinguishable frome one another
  • Portability - ease of transporting or transmitting monetary units across distances
  • Durability - resistance of monetary units to rot, corrosion or deterioration of value
  • Security - resistance to counterfeiting or forgery
  • Sovereignty - the source of its value, trust factors and permissions necessary to transact with it
  • Government Issued - authorized as legal tender by a government

Uff.. money sounds complicated doesn't it? Here is the short version, the important things that you must

know as an investor. Money is important. Understanding money will make you a much, much better investor,

trust me. If you do not understand money, you can not be a good investor. All rich people are understanding

money and what I am about to tell you inside out.

Inflation

Lets say in the economy there are 10 products, and there are 10 money units. Central banks like the FED, can print money when they want. When they print, they increase the money in circulation. You then have not 10 monetary units, but you have maybe 20! The money supply doubled. If the product costs $1, it now costs $2.

The product is much more expensive now, is it now better? The answer is NO! It is the same product, but you must pay much more now. See, this is inflation. It can be bigger than you think. As a rule of thumb, every 5-10 years the purchasing power of your money halves. This is the reason, why in todays world, everyone needs to invest (or create a business). Just saving the money in the bank is over. There are no positive real rates you can get on your money.

Paper Money

If you look at a $100 bill. You much do you think it is worth? Production cost: $0.14. 14 cents. Here is the point. Paper or Fiat money means: the money is not backed by anything. Only the promise of the government that it will hold its value. The problem is, it does not hold its value. You have read the example with the $1 product that costs now $2! Your purchasing power erodes. The question is: has money been backed by something before? The answer is yes.

Gold backed Money

Gold was used as money long before fiat money, literally thousand of years. Gold is scarce, you can increase the supply of gold only very slowly. You must find the gold, dig it out of the ground, refine it, process it and sell it.

A lot of work and energy. Paper money in contrast is abundant, the supply is unlimited. The central banks can just push a button, and they create more money. With gold this is not possible.

Why gold is a store of value

Gold has held its purchasing power over the years. While the paper money will buy you less, one ounce of gold, will buy you roughly the same as 100 years before. The purchasing power of gold remains roughly constant.

That is why it is better to store your wealth in gold than in fiat currency. But remember, gold does not do anything beyond storing your value. You can not expect to increase your purchasing power with gold. If you want to grow your wealth, you must invest and buy productive assets. We will cover them in later sections.

The Banking System

There are central banks and commercial banks. Central banks control the money supply and monetary policy. Commercial banks operate in the real economy and are connected to central banks.

If you hear fancy terms like quantitative easing, it always means money printing by central banks.

Do not get fooled. Through the printing of money, the FED buys bonds and pushes interest rates artifically low.

This stimulates the economy because money is cheap and can flow more easily. The central banks might save the economy from time to time (and the asset markets) but they are destroying the currency. They choose medium term relief for long-term disaster (someone will pay the bill, the average employee). The problem is, central banks have abused their power. They print more and more money at an accelerated pace. Your purchasing power of your money (what your money buys you) gets less and less over time.


5. Understanding the Economy

Economic Cycles

I will make this section short. There are periods of economic growth, and periods of economic contraction (recession). The long-term growth rate of the economy comes through more productivity (innovation, use of technology, more efficient machines and so on). The economic cycles can lead to much higer or lower growth rates than the stable long-term productiviy growth rate of the economy. This leads to boom and bust behavior.

Not only in the economy, but especially in asset markets such as the stock market. The central banks can even exacerbate this behavior through monetary policy. They decrease money printing and raise interest rates (compare this to a braking car) or they increase money printing and lower interest rates (compares this to pushing the gas pedal to accelerate a car). It is the same for the economy. The effects of central banks contribute to the boom and bust behavior of assets and the economy. A normal business cycle of the economy last for 5-12 years. That is why on average you see a roughly 1 year recession every 5-12 years. Think of it as season, summer and winter. You can't have one without the other.

Long-term Debt Cycle

Besides the economic cycle, there is a more long-term cycle called the debt cycle. It may last for 50-100 years. Debt cycle means, governments, central banks and the private sector are increasing the debt levels more and more. More money printing, more debt, less economic activitiy. For a long period of time, this works and the economy grows anyway.

Even though it slows down over time. At some point, there is a debt deleveraging. This can mean two things. Either there is a deflationary bust - the economy goes into depression, businesses go broke, people lose their jobs, and all asset prices collapse too. Or there is a high inflation period that will render the currency worthless, savers get wiped out. You want to own hard assets like gold because assets like stocks will go down in deflationary bust and cash will become worthless in a inflationary deleveraging.


6. Understanding Businesses

How Businesses Work

Example: let us take Susan, she is an entrepreneur. She wants to start to build a business but she needs money to start it. At the beginning, she can get money from friends and family. She registers the company at the government agencies and is now 100% director and 100% shareholder. Susan then spends money to build a prototype to demonstrate how the real product will work. She goes to the bank for more money, but they will reject her. She then approaches Richard, an investor. Susan shows Richard the prototype, he is impressed. They agree to the following: Richard will give Susan some cash in exchange for 25% of the shares.

Susan is still 100% director, this means she is doing all the hard work. She is only to 75% shareholder. This means Richard gets 25% of the shares. Susan now only partly owns her own company. Susan now spends more to build the final product. Once it is ready she sells it to Goofy and his friends. She sells more and more of it. Her success is seen by Warren, a big business owner.

Warren operates in the same sector and is interested to buy Susans business. He makes an offer. They agree to it. Intially, lets say Susan took $100K from Richard, the investor for 25% of the shares. At that point in time, the company was worth $400K (4 times 25% is 100% of shares which equals the total company valuation). Warren makes a deal with Susan to buy the company, that sells now a lot more than when she made the deal with Richard. So the valuation of the company increased. The 100% of shares are now worth much more because the company sells more product and get more profits. Richard buys the company from Susan for $5M. This means Susan gets $3.75M in cash from Warren for her 75% shares.

Richard, the investor, gets $1.25M in cash from Warren for his 25% of shares. Warren owns now 100% of the shares. He owns the company, the revenue and the profits now. But Susan and Richard both have a big payday. I tell you this example to explain how businesses work. This is how. The important part in this story is Richard, the investor. This will be you in the future. Richard invested $100K into Susans company. He took risks. Susans company could have also gone broke. Then Richard would have lost the $100K.

Obviously, Richard made a very good decision to invest. He gets $1.25M in cash back versus his $100K investment. This means his total profit is $1.15M. Let us say it took 5 years for Susan to build the company and sell it. This means Richard made over $1M in just 5 years. Here is the interesting point. You want to learn how to invest and become a good investor that generates lots of profits? Let me tell you, you can achieve $1M not only with $100K but is possible to do it with much less capital. Extreme winners in private equity (angel investments) can look like this: you invest $2K in a early pre-seed stage round of a company. The company does incredibly well, finally listing on public exchange (IPO). The company is now not private any more, but a public company.

You sell your shares after the lockup period after the IPO. Your get now $1M. It took 5 years. Your $2K investment is now $1M. This is an example of a massive winner and it does not come often. But if you approach investing systematically and with know-how, such an example can indeed happen to you in real life. The example shows, you do not necessarily need much capital. It is unlikely to make it with $2K but the point is: if you invest small sums of money systematically, good things will happen to you.


7. Understanding Industrywide Conflicts of Interest

Conflicts of Interest

Conflict of Interest means that a counterparty (not you, the other party) pursues their own interests which are usually not aligned with your personal interests (most of the time: totally opposite of your interests).

Example: Your local bank suggests to invest your money in the stock market

  • Your interest: grow your capital by investments
  • Bank/Banker Interest: earn fees by selling you an investment product. The investment products offered to you are not the ones where you can effectively grow your capital, but investment products for which the bank/banker earns high fees.
  • 99% of banks/bankers do not care about you at all. All they see is their own income.
  • No one will manage these investments for you. They get bought for you with your money, fees get deducted and that’s it. Good luck!
  • Your interests and the bank interests are not aligned
  • You should only agree to deals and investments where you own interests are aligned with the counterparty
  • Example: you find a talented investment manager. He suggests to invest your money in the stock market. He tells you that he contributed his own capital to his fund (35% of fund capital is his own capital).
  • Your interest: grow your capital by investments
  • Investment Manager interest: grow his capital by investments. As he has his own money in the fund, he will do everything that the investment becomes a success! He has “skin in the game”. His interest and your interest are aligned



8. Understanding Financial Markets

Financial Markets

What are financial markets? Watch this Video, then continue reading.

The following list will explain:

Example: Your local bank suggests to invest your money in the stock market

  • Marketplace where the trading of securities/assets occurs
  • Securities: stocks, bonds, commodities, …
  • Assets are listed on regulated exchange or over the counter (OTC)
  • OTC: no middlemen in between. Direct trading between two parties
  • Financial markets and economy are different but strongly linked
  • Financial Markets enable a capitalist economy: resources are allocated and liquidity for businesses is created. Buyers and sellers can trade their financial holdings. Investors/Lenders have excess funds and can get a return. Borrowers need money to build.

Investor vs. Trader

What is the difference between an investor and a trader? The image below and the following list will explain:

Investor:

  • Higher timeframe (years), Buy and Hold
  • Buys assets that produce annual cashflow (dividends, interest, rent)
  • Buys assets that are priced below intrinsic value, and sells them when they reach or rise much above intrinsic value
  • Does usually not use stop losses
  • Position Size usually 2 5% but up to 30% possible
  • Usually, no use of leverage
  • Usually, long only

Trader:

  • Lower timeframe (days, weeks, sometimes months)
  • Focuses on price development. Fundamentals can sometimes play a role.
  • Uses Stop Losses to manage his risk
  • Aggressive Risk Management
  • Position Size usually 0.5 2%
  • Most likely, use of leverage
  • Long & Short

What you need to become a good investor

  • You need to manage your own finances.
  • You need capital.
  • You need know how.
  • You need good ideas.
  • You need to execute well.

Total Return

What is total return?

  • Total Return = Return from Annual Cash Payout + Return from Underlying Asset Value
  • In the case of stocks: Total Return = Dividend Yield + Change in Stock Price
  • Total Return is calculated on an annual basis (p.a.)
  • Example: 3% Dividend p.a. + 15% increase in Stock Price p.a. = 18% Total Return p.a.
  • Total Return is what ultimately matters for an investor
  • Even if there is a high dividend yield, if the stock price decreases too much, Total Return
  • can be negative!
  • Most return comes from change in stock price usually
  • Cash payout (dividends) can be important, but they are secondary compared to changes in the value of the asset (stock price)
  • Therefore, always only buy undervalued assets

Total Return explained in a different way: Carry Trade. This is used by rich investors and is the reason why the rich get richer.

Asset Classes

Traditional Asset Classes

  • Public Stocks: Equity (Shares) in companies that are listed on a public exchange (e.g. NASDAQ).
  • Public Bonds: Debt (=Loan) in public companies or governments. You will get interest for loaning your money.

Alternative Asset Classes

  • Private Stocks: Equity (Shares) in companies that are private. You can invest in these companies if they need financing and if they allow you in (network).
  • Private Bonds: Debt (=Loan) in private companies. You will get interest for loaning your money. You need to negotiate directly/indirectly with the company.
  • Crypto Assets: Tokens on the blockchain that represent equity ownership in the digital network of the specific token.
  • Commodities: Energy Commodities: Oil, Natural Gas, Coal, Uranium, .. / Agricultural Commodities: Sugar, Corn, Wheat, ... / Industrial Commodities: Copper, Lumber, Water, Cobalt, Lithium, Vanadium, ..
  • Precious Metals: Gold, Silver, Palladium, Platinum
  • Real Estate: Concrete Gold. Real Asset: people need Real Asset to live in or to work in. Typical for investors: residential multi family real estate (apartments).
  • Derivatives: Derivatives exist on stocks, bonds, commodities, currencies, .. / CFD's (Contract for Difference), Futures, Options, etc.
  • Others: Art, Luxury Goods such as Watches, Wine, Whisky, etc.

Tools, Brokers, Investment Platforms

Good Brokers to buy public stocks, public bonds:

Investing Platforms to buy private stocks:

Crypto Assets

Charting Platforms

Fundamentals

News


9. Leveraging Success Factors in Investing

Success Factors in Investing

This is an excerpt of success factors in investing. Use them and your results will skyrocket!



10. Understanding Asset Classes and Financial Instruments

Historical Performance of Assets

You can clearly see in the chart below that productive businesses (stocks) are outperforming cash (unproductive, gets devalued through inflation). Understand the differences in asset class returns! Not shown on the chart but with high returns: real estate, crypto assets.

11. Understanding and Managing Investor Psychology

Investor Psychology and Market Cycles

You can clearly see in the chart below that assets can have high volatility to the upside and downside. At the end of the day, buyers and sellers are human beings. Every human, even professional investors, are driven by emotions to a certain extent. You can see these emotions of investors in the price chart of assets. During periods of price decline, no one wants the asset. There is depression and fear in the market. But this is actually the best time to buy. During periods of price advance, everyone wants the asset. There is greed and euphoria in the market. This is actually the best time to sell. Most amateur investors do the opposite, they buy when assets are at historically high prices and sell at a loss during periods of low prices. Superior investors buy when there is blood in streets and sell on euphoria.

12. Understanding and Creating Investment Strategies

Trading and Investment Strategies

Think of it this way: there are a million ways to make a million dollars! Each person is very individual if you think about it: different tastes, hobbies, activities, thoughts, personalities, … Do you think one investment style would suit every person on the planet? No! This is why you have to keep an open mind. I will show you different strategies for different profiles. You can then think what would best suit you

Trading Strategies

  • Daytrading
  • Swingtrading
  • Positontrading
  • Discretionary Trading
  • Algorithmic Trading

Investing Strategies

  • Long Only Investing
  • Long and Short Investing
  • Arbitrage Investing
  • Event-Driven Investing
  • Stock Picking
  • Sector Investing
  • Market Investing
  • Fundamental Investing
  • Technical Investing

Which Investing Strategy is most suitable for beginners?

In my opinion, long-only sector or market plays, in the high quality assets (stocks, crypto assets, real estate), as a buy and hold strategy, is most suitable for most beginners. Why? It is a robust, hands-off, risk reduced, time-efficient, effective (regarding returns) way to invest and still capture plenty of asymmetry and long-term sustainable returns.

Watch the Video below to understand how to get started in investing as a beginner.

It will show you in only 4 simple steps how to begin getting success with investing.

13. Understanding and Implementing Technical Analysis

How to read Price charts and why technical analysis is important

Price is the basis of technical analysis (charting). You use technical analysis to optimize timing in investing (perfect timing is not possible, optimized timing is possible!) If you use it properly: you will have better investment results. Why is it so important? Assume a company reports earnings: they have losses! Company is in bad shape. The price of the stock is NOT going down on bad fundamentals, instead it goes sideways to slowly up. Why? Price shows you: there is a massive buyer accumulating the stock! Price shows what real buyers and sellers of the stock are doing! Price is the closest fundamental that you can get.

Watch the video below to see an example of Technical Analysis for Crypto Assets (Bitcoin).

That is why psychology is so important in investing. It is reflected in price behavior. Why? Because price reflects real buyers and sellers. Those are real people (with emotions: fear, greed, hope, enthusiasm, …). There is a price for every investable asset (stock price, apartment price, gold price, …). Price is determined by supply and demand. Decreasing supply and increasing demand: higher price. Increasing supply and decreasing demand: lower price. Price is determined by demand. People buying the asset: positive demand. People selling the asset: negative demand. Price is determined by supply. How much pieces of the asset are available?

This is how you can visualize prices: candlestick charts. This is the basis of technical analysis.

14. Understanding and Implementing Fundamental Analysis

Valuation of Assets

The key question is: How to determine if a stock is cheap or expensive? There are several ways of doing this, see below:

Valuation Methods for Assets

  • Valuation Multiples (e.g. Price-Earnings-Ratio P/E, or Price-Sales-Ratio P/S, or Price-Book-Ratio P/B or Price-Free-Cashflow P/FCF).
  • Discounted Cashflow (DCF) Model and Net Present Value (NPV) Calculation
  • A unique valuation methodology that I use and explain in Mastering Investments

Watch this video to see an Example of the Valuation of a Public Stock (ALIBABA).

I explain how I use Valuation Multiples but also absolute company financials.

15. Building and Following a Holistic Investment Framework

Why is a holistic investing framework so important?

Holistic means the method covers not only "what to buy" but every aspect of successful investing: this includes personal finance, taxes, mindset, psychology and much more!

Examples of the individual parts of a Holistic Investing Framework


16. Identifying Neglected Value Sectors

What are value sectors and how to identify them?

These sectors experienced heavy decline in prices, depressed investor sentiment, no one wants to invest. But often, these sectors are turnaround candidates. If you go against the herd, the upside can be tremendous. You can identify them by fundamentals, technicals and sentiment. All of this is explained in detail in Mastering Investments.

Examples of neglected value sectors

This is basically value investing at its finest! Expressed in one chart below.

Buy high quality cheap when sentiment and price is depressed and future returns will be high.

17. Identifying Innovative Growth Sectors

What are innovative growth sectors and how to identify them?

These sectors have very high growth rates and are often part of a megatrend that lasts for years.

Examples of innovative growth sectors

  • Crypto Assets and Blockchain related Companies
  • Renewable Energy
  • Artificial Intelligence, etc.


18. Generating Unorthodox Investment Ideas

What are unorthodox investment ideas and how to identify them?

Unorthodox means most people don't notice these trends or ideas. They can very new (e.g. new markets), unestablished and are often viewed skeptically by most. The key is to identify those sectors, markets and ideas that not only are viewed skeptically by most, but also have good fundamental developments. This can be seen by the people, capital that pours in the sector or by the number of new developments, new firms and new products and services.

Examples of unorthodox investment ideas.

  • Digital Security
  • Health and Wellness related Cannabis, etc.



19. Managing Risk of Investments

Why is managing risk so important in investing?

If you don't manage risk, your capital will at some point suffer serious drawdowns that you can potentially not recover from. This scenario should be avoided at all cost. Rule number one: don't lose money. Rule number two: see rule number one. How can this be done?

Example of risk management techniques: Proper Position Sizing

  • No more than 0.5 1.0% per individual position (e.g. individual stock)
  • No more than 2.0 5.0% per theme or sector (e.g. green energy sector, crypto sector, …)
  • Why? If one company goes bankrupt you only lose 1.0% of your portfolio
  • Why? Sector does not go bankrupt but can fall 50%: you would lose 2.5% of your portfolio
  • 1.0 2.5% losses of entire portfolio: capital preservation!
  • In reality: losses will be higher but it does not matter if you have a 20%, 30%, 40% drawdown
  • With this position sizing, your losses WILL BE LIMITED. You may temporarily halve your portfolio but long term, your capital will be preserved and in fact will grow over time!


20. Executing Investments & Live Application

Proper execution is important in investing. Execution concerns multiple areas: technicals, fundamentals, sentiment, and much more. There are several tools / brokers / platforms / techniques that can be utilized.

If you don't manage risk, your capital will at some point suffer serious drawdowns that you can potentially not recover from. This scenario should be avoided at all cost. Rule number one: don't lose money. Rule number two: see rule number one. How can this be done?

Example of areas and tools that can be used for investments execution.

  • Technical Analysis
  • Example: Tradingview
  • Major Support/Resistance Levels, Trend, Buy Levels



21. Building and Managing Diversified Investment Portfolios

Why is it important to build and manage diversified investment portfolios?

If you have little capital/wealth, a highly diversified portfolio will give you some returns but it is not optimal for building real wealth. The best investors have built their wealth through concentration and focus. Once your portfolio grows in size, you can start to diversify more and more, to protect your capital.

Two scenarios how to set up investment portfolios:

  • Low capital/wealth: concentrated positions, high focus. High growth to build wealth faster. Focus on appreciation.
  • Higher capital/wealth: more diversified portfolios, less concentrated positions. Protecting capital is more important than to build wealth. Focus on income.

Still don't know how successful investing works? Here are the key takeaways for you in one chart.

A lot of work has been going in to this article and the resources, I

hope you appreciate it.

If yes, please share the article, the graphs and the videos.

Best regards, Harry

Are you serious about to Learn How To Invest and get Financial Success?


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