Small cap stock trading offers some of the best risk-reward opportunities in the entire stock market… learning how to trade them successfully turned from being a broke public school teacher to a wildly successful multi-millionaire.
RagingBull Founders (myself included) uncovered a new strategy that provides even better risk-reward opportunities than trading small caps — one that I wish I had access to when I first started out in the markets.
One of the ways I’ve been able to find so much success is largely due to the fact I trade a basket of small-cap names. That means I find the stocks I’ve traded before, and understand the ins and outs of the patterns.
For example, Zagg Inc (ZAGG) is one of my favorite small caps to trade.
Trading ZAGG continues to be a top performer for me in 2019. I’ve been in and out of it since August and my current position is based on an earnings beat along with the pending Bank of America update.
I generally do not trade with the goal of a buyout, but given the NY Post article and my experience, a double-digit takeover bid wouldn’t shock me.
ZAGG closed at $8.06 on Friday, and you might think, “Wow, Jason if ZAGG does get the takeover bid, you’d get paid!”
Sure, I would make money if that happened… but the thing is, these returns are consistent but not as massive as some of the companies in the private sector. The risk-reward when you invest in startups is more attractive than your typical small-cap…
And I’m starting to realize these companies in the private sector are very similar to small-caps… and when you have access to deal information, you stack the odds in your favor.
Today, I want to show you why angel investments might better investments than small caps… and how they could help diversify your strategy bag — potentially providing you with some out-of-this-world returns.
Sure, small-caps could provide some wild returns, but if you invest for the long haul… you’ll find it’s really hard to pick out winners.
For example, in 2019, the best performing small-cap stock is nLIGHT Inc (LASR)… it’s up a whopping 21.58% year to date. When you consider that from a risk-reward standpoint… it’s actually unfavorable.
That means small-caps don’t make great investments, but they are great trading vehicles.
The way I diversify my trading is by adding new strategies… and if one strategy doesn’t provide me with clear-cut opportunities… I use another. For example, if I don’t see my patterns popping up in small caps, I’ll use my options trading strategy…
But the thing is, those are short-term trades… one thing I was missing was a long-term strategy.
Boost Your Returns With Angel Investing
If you don’t know, there are private companies out there (you probably know them as startups)… and they provide some of the best returns I’ve seen in my career. The best part: you can invest in these companies with as little as $50… and that means you can minimize your risk while maximizing your profit potential.
That means you could still trade the stock and options market… and have some side investments that offer insane returns.
Let me show you what I’m talking about…
See those returns in the chart above?
Well, those are just a few examples of some returns angel investors raked in… because they took a stab and invested BEFORE these companies went public.
Previously, investing in private companies was impossible, unless you were a high-net-worth individual (HNIW) with access to deal flow. That’s right, you couldn’t have been in on the ground floor in pre-IPO deals like Facebook (FB), Twitter (TWTR) and Amazon.com Inc (AMZN).
Just imagine if you were able to invest a measly $100 in Pinterest (PINS)… that would’ve turned into hundreds of thousands of dollars… from a risk-reward standpoint, investments make a lot of sense, when compared to small-cap stocks.
I don’t know about you, but I haven’t heard of someone putting $100 into a small-cap and turning it into six figures or more before… and don’t get me wrong here, just because the risk-reward is favorable, it doesn’t mean angel investments do not carry any risk.
That’s all a possibility now… and The Boardroom will reveal a government “loophole” that unlocks the doors to a new market… one that provides you with the ability to spot some of the biggest opportunities in investing here.