Chris Vermeulen – Earning 15% per year with ETFs.
My next guest is a lifelong entrepreneur who created a financial newsletter almost 20 years ago, that helps investors earn 15% per year with ETFs. Not only that, the maximum losses with his strategy are around 6%. In this episode, we talk about his investing and trading background and the specific strategy he uses today. Please welcome Chris Vermeulen.
Payback Time Podcast
A Podcast on Financial Independence. Hosted by Sean Tepper. If you want to learn how to escape the rat race, create passive income, or achieve financial freedom, you came to the right place.
- (00:43) – Show intro and background history
- (03:03) – Deeper into his background history and family business models
- (04:45) – What was his first passive income font
- (07:49) – Deeper into this business strategies
- (12:12) – Understanding his trading strategies
- (21:04) – Deeper into his strategies and technical details on this investing model
- (30:24) – The different strategies for protecting and growing wealth
- (33:33) – A key takeaway from the guest
- (38:58) – What is the worst advice he ever received
- (41:42) – What is the best advice he ever received
- (45:20) – Guest contacts
[00:00:04.520] – Intro
Hey, this is Sean Tepper, the host of Payback Time, an approachable and transparent podcast on financial independence. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go. My next guest is a lifelong entrepreneur who created a financial newsletter almost 20 years ago that helps investors earn 15% per year with ETFs. Not only that, the maximum losses with this strategy are around 6%. In this episode, we talk about his investing, trading background, and the specific strategy he uses today. Please welcome Chris Vermuelen.
[00:00:43.020] – Sean
Chris, welcome to the show.
[00:00:44.550] – Chris
Hey, thanks for having me, Sean.
[00:00:46.000] – Sean
Hey, thanks for joining me. Why don’t you kick us off and tell us about your background?
[00:00:50.410] – Chris
Sure. Where to start? I’ve done a lot of different things. Starting back in high school when I was 16, I got hooked into building classes in high school, got hooked into the stock market and finance class and really everything branched out from there. I became somewhat of an inventor, creating health products. With my father, we started a business, got into finance as well, into financial trading stocks and ETFs and creating strategies and systems. And more or less I’ve just always been an entrepreneur. My parents have been entrepreneurs, so I followed in their footsteps, helped them start their businesses or run their businesses. As you know, if you’re an entrepreneur, never really turn your brain off. It’s always working and it’s never ending hours, but the key is to obviously do what you love so the work doesn’t actually feel like work. But I’ve always been into the finance markets. I’m a numbers guy. I love to make money, I love to save, I love to forecast… Not forecast, but I like to go for goals and set goals and reach them and constantly do new things. I’ve got my hands and feet into a lot of different things, from real estate to inventions to licensing to sharing my train investment strategies with others around the world and educating them.
[00:02:07.350] – Chris
And really, I’ve just gone full circle of learning the hard way. Usually everything on my own, reading a lot of books, going to a lot of seminars, and I’m big into motivational things like a zig -Ziggler. My parents used to take me to zig -Ziggler when I was a kid. I was actually up on stage with them once. I was brought up in a really good opportunity where I was shown that if you work really hard, you do what you love, you stay motivated, you hang around people who are where you want to be or where you want to go or on the same journey as you, life is so much fun. That’s what I’ve been working on my entire life, is just going in the direction, doing the things that I’m passionate about, that I want to do, that I want to learn, and then just diving in with both feet and just loving every step of the way. I end up having all kinds of different ventures and revenues and passive income streams. That’s what it’s all about, is having that income and time to do what you want to do, right?
[00:03:03.160] – Sean
Absolutely. A lot of our listeners are driving towards that as well. How do they turn that corner to creating financial independence? How do they create some passive income? Before we jump into some of your ventures, especially your current business, which really deals with, it sounds like trading. I’m curious here. You helped your parents, their businesses. Can you share what business models do they have?
[00:03:24.200] – Chris
Sure. Well, my dad was a denturist, so he used to make teeth for people. My mom was in the hearing aid space. They actually just sold their businesses a few years ago. They had multiple practices. My sister and I would help them do marketing stuff: licking, sticking, folding envelopes, like thousands of them, mailing them out, doing household. We’d run around town, sticking flyers indoors. We do all kinds of that stuff. We go to events with them for marketing and also just motivational events to stay inspired. My parents were into the, to me, it’s called the old school business. You have to work for your money. That’s not the way the direction I’ve gone. I’m all about leveraging our time, do something once, be able to use it for life or sell that at least thousands of times over, so your time is highly leveraged. But yeah, that’s what they did.
[00:04:15.960] – Sean
Still a really good experience and gave you that entrepreneurial spirit at a young age. Your sister, did she get into the same line of work as an entrepreneur like you?
[00:04:26.450] – Chris
Well, she worked with my parents and ran their clinics with them. And she also has her own company now. And so, yeah, she was definitely more brick and mortar working with my parents with their businesses versus where I am, is more so sharing, selling information that’s highly leveraged, scalable.
[00:04:45.860] – Sean
Got you. Okay. Let’s fast forward here then to how did you or what was your first venture that created passive income?
[00:04:53.720] – Chris
The first venture was in college, CC… What was it? It was in college at Seneca College in Toronto. My roommate was into web design. I grew up in the country, long story short, I grew up in the country with no TV. Literally, all I did was hunt, paintball, fish, build log cabins, run around. I was always busy. And then I go to Toronto, the city, and I get hooked on TV, CMBC and Speed Vision. Those were the two shows, the two channels I love. And my first passive income was I saw an ad on TV for some stock trading newsletter. This was back in 1999, believe it or not, 1999. And I go, Oh, my gosh. I saw how much people were making day trading on CMBC, like 10K, 100K during the big tech phase. I was like, All I want to do is learn to trade and then share my trades with others like this newsletter. And if I charge 50 bucks a month and I get a thousand people, there’s my 50K a month US, and I’m golden. And so that was my first thing. So I talked to my partner, I said, Listen, if I learn the markets, can you build the website and run it and manage it, and I’ll learn the markets.
[00:06:03.710] – Chris
And here I am doing it 25-plus years later.
[00:06:08.560] – Sean
Seriously, is this the same business?
[00:06:10.880] – Chris
Same business. I’ve been changing and evolving over time. I’ve had different websites, different names of the newsletter because I’ve gone from trading… Initially, I started trading stocks, small cap stocks, tech stocks, and then I got into more so covered calls, and then I dabbled into Forex, and then I got into futures, and ETFs really became popular later and I got more into ETFs. And as your capital grows, I like to move more into larger assets like an ETF, something that moves slower, but I can dump in huge amounts of money and not stress over it. So it’s evolved over time to different names of newsletters, and my strategy has evolved to be more so index, bond, currency, ETF trading only because you can dump in large amounts of money. I’ve gotten away from the stock trading. But going back to your whole question here, we started a newsletter in our dorm room. We ended up getting thousands of subscribers and making pretty stupid money before I pretty much even graduated college, not only from trading, although that trading was pure luck because I did not know enough. And then we had the dot com bubble.
[00:07:14.190] – Chris
But we had a newsletter running and it was with PayPal. Actually, no, it was a company called Two Checkout. It’s really weird company, a different business model. Anyways, that was my first income stream. I eventually had a partner with that who knew about trading because I didn’t, so we worked together. And then I got into physical products after that. I actually started a health product business off the back of that as well because I had capital, I had time and all that stuff. So I’ve done a lot of different things. But the newsletter was the first business, which I still do today, and I absolutely love it.
[00:07:49.720] – Sean
Sounds like the foundation of your passive income is that newsletter. Let’s break that down a little bit because listeners are going to be like, How do I create a newsletter to monetize my expertise? I assume is it something that people subscribe to and then they see content or content is sent to them thereafter? Or maybe both?
[00:08:09.630] – Chris
Yeah. I mean, everybody’s got some skill, something that they’re passionate about that they’re probably better at than anyone else. The reality is you only need 1,000 people in this world to love what you do and be passionate about that same weird little thing. You can make a fortune and you can be around the coolest people with the same passions. So anybody can really do it. To run a newsletter, it could be as simple as literally I started out just a newsletter service like a MailChimp. It’s free. You can get up to 12,000 people or 1,200 people for free to email. You set up a PayPal, subscribe link, or a buy now button and you can build up a paid newsletter with literally no tech-free. And usually what I do to get in front of people is I write really interesting content and timely content and I publish it on all kinds of different sites and then people read it. And if they agree with what I’m talking about, they like the way I do things, then they would come to my website, they check it out and they would subscribe. So anybody can really do it.
[00:09:09.800] – Chris
And it’s not tech-heavy at all. You can do it literally at no cost.
[00:09:15.530] – Sean
What is the frequency? Do you have a weekly or a monthly newsletter?
[00:09:20.050] – Chris
Yeah. We actually have several different newsletters depending on how active you are or how passive you want to be. I would say we send out a daily update, like a video report to our members that kind cover what happened in the markets yesterday in overnight trading, what we expect is going to happen today. This is for a more active newsletter. Our premium investing strategy is twice a week. It’s a Monday and Wednesday video. That’s it. Then when there’s a trade, we put those trades on, we issue those alerts. So it’s pretty straightforward. It really comes down to how active you want to be in the markets when it comes to trading or investing.
[00:09:54.480] – Sean
Got it. And what pricing tiers do you charge?
[00:09:57.690] – Chris
It starts around $700 a US a year, up to about $3,200 a year for the service.
[00:10:03.350] – Sean
Okay, got you. And aside from the newsletter, do they get anything else? Any tools, any interface they get to use every day?
[00:10:11.690] – Chris
I keep it pretty low tech. They get a member’s area that they can log into and everything’s in there. We do have lots of education. We got technical analysis courses, how we read the charts, various indicators that we use. We have our own proprietary tools that they get to see that we share in our updates. They get access to some pretty interesting ways that we get insight from the markets. But there’s no interface. There’s no real software. We have a mobile app that they can go on. I really go the opposite of everyone else. I’m like, How do we keep it simple, stupid? I literally back it right out. People want to like, We want software. We want to be able to do this and put it in our own charts. Actually, the easiest way, in my opinion, is the less you have to do, the fewer the trade you have to do, the better. That’s what I’ve just designed it, is you just need the basic updates to stay on the loop so that your brain, you’re mentally prepared for what’s happening in the markets with your investments, and then you just get the trade alerts.
[00:11:08.460] – Chris
You can be as active as you want. There’s a community in there. People chat back and forth and talk and things like that, but less is more. Really, my main focus is, as the service evolves, it’s always generally sounds bad, but it’s always evolved around me in terms of I’m providing what I need and then I share it with everybody else. Right now, my core group of users, they’re all well off, fairly wealthy, lots of money in their accounts. They have multiple businesses or they’re busy professionals. They want a large chunk or all of their capital traded with our strategy, which is a very low risk strategy, and a lot of them want it done for them. We do have… You can follow the signals or you can actually have it auto-traded at no additional cost. Mind you, we don’t manage your money. The broker does the trade executions for them. But that’s our core group is how do we manage large accounts and keep it very protected, avoid draw downs, avoid big corrections and bear markets and profit from them by rotating to various assets that have no correlation to the stock market.
[00:12:12.790] – Sean
I want to jump into your trading strategies here in a moment and learn how it works, what returns people can expect, that stuff in a second. But I really like this portion of where we’ve gone with the conversation because we have a lot of entrepreneurs that want to create a membership business. They are an expert at something. And your low tech approach is awesome. So to step through the process here, you go to like a Mailchimp, which I’ve used, I know, Constant Contact is pretty low priced tier or even the free tier like you mentioned. You put up a paywall, they subscribe, they then get an auto drip campaign. It sounds like every few days or based on their tier, it sounds like they get a different frequency. Is that correct?
[00:12:56.790] – Chris
Yeah. I mean, it’s always content myself or my team has put out. It’s not like a premeditated, pre-written thing. It’s actually like current analysis and updates. But yeah, they get it continuously.
[00:13:08.340] – Sean
Got you. You guys are doing, it sounds like a lot of homework almost every day to make sure you’re on top of this newsletter.
[00:13:15.190] – Chris
Well, I’d like to say that, but it’s not really true. I’m a technical analyst, and I learned a long time ago that if you buy a company that has got good earnings, it’s growing by leaps and bounds. If the marketing condition is not favorable for stocks, so it’s in a correction or you’re in a bear market, those really good companies that have good earnings and fundamentals still get cut in half or more in price. Everything now is I threw fundamentals out the window. I haven’t watched news in over 10 years. If there’s something breaking news that’s big, it’s usually my my eleven or 13-year-old kids come running in and say, Dad, did you hear about this? I didn’t even know about COVID until we had already closed our position. I am out of the loop when it comes to news. I don’t like negativity. I listen to a lot of motivational stuff. I hang around a lot of motivational people, and news to me does absolutely nothing. You never know when news is going to hit. You don’t know how people are going to react to it. So it’s just a crapshoot. So I follow price, 100 % technical analyst.
[00:14:12.910] – Chris
And all my strategies use a lot of inter-market analysis, meaning it takes all kinds of different assets, sectors, commodities, currencies, cycles. It pulls it all together. And we follow price, we follow where the big money is going. And really, the software does all the work. So that’s the key. I can turn it on, I can look through my charts in the morning and I’ll know how strong the trend is, if it’s weakening, all things like that. I can technically be done at 9:30 in the morning once I send out my morning video. And my strategy is end of day, meaning if we have a trade alert, we issue it after the close. We need confirming prices. So it’s pretty straightforward. Anybody can enter the trade in the evening. They have all day, all night to put the order in to get in at the opening bell the next day. Mind you, our targets and stops are live. You put them in with your broker. So if they’re hit intraday, they would execute. But it really doesn’t require much work. And that’s what people like subscribers who use the service, they’re always blown away with this.
[00:15:12.950] – Chris
They’re like, It’s like watching paint dry. We don’t trade a lot and we don’t have to do a lot of analysis and the reality is not much changes in the market from a day-to-day basis. And if you just get rid of all that noise, the markets are not that hectic or busy. I like to look at the markets like the Ocean Tide. The Tide is going up or it’s going down. You’re either in a bull market or a bear market. And so think of me as I’ve got this really awkward strategy that passive investors, like with an advisor, they think my strategy is active, even though there’s only five to twelve trades a year. And an active trader thinks mine is like watching paint dry. There’s not enough trades. And I’m in no man’s land. I’m like the surfer on the horizon. The tide is going up or going down, actually doesn’t matter. But I’m waiting for that of waves. There’s nice set to come in. Those are the opportunities in the stock market that I look for. You hop on them when they’re nice and clean. They got strong technicals behind them. We ride that, we surf it.
[00:16:11.200] – Chris
We can see when it’s about to break, so we can trim off positions, lock in gains, reduce our risk, and then go up, put the money back into cash, go out, wait for another set, and pick the best opportunities, the best, hottest assets at any given time in the market conditions. It doesn’t always have to be stocks. It could be a currency play. 2022 was the year of the dollar index. You just had to buy the dollar index while the world fell apart when it comes to stocks and bonds, and the dollar index rocketed higher. You don’t have to be active to make a lot of money. You just have to be protective. If you protect your capital from losses, the profits actually just take care of themselves. You’re not out there hunting for big gains. You just get in and catch these nice waves and they’re calm, cool and collected, which is the key when it comes to trading, because emotions are the enemy. Yes.
[00:17:01.560] – Sean
A lot of what you say there is very similar language to what we use the tides of the ocean or the waves of the ocean. I usually say let those waves go up and down, just be calm, cool, and collect. Don’t freak out. Don’t let your emotions take over. But let’s let’s dive into your strategy here. What trading is this?
[00:17:25.300] – Chris
Well, I’ve given it a name because it’s in the middle of no man’s land. It’s not active trading. It’s not passive investing. It’s stuck right in the middle. I call it asset revesting. You’ve got investors who have, I’ll just say in general, I have an advisor who are super passive. They invest, they plop their money in the markets. They’re there to stay. They’re riding that roller coaster through good and bad. They’re going through the emotional stress that comes with that stuff. Investing to me of parking your money when it comes to the stock market and bond market, different for real estate, is dangerous, especially if you’re in your later years or close to retirement or retired, you’ve got a lot of capital. Last thing you want to do is just set it and forget it because you don’t know when you’re going to need to use that money or pull it out. And asset revesting is really giving control back to the investor saying, Hey, listen, our point here is we just are going to hold assets that are going up in value. And if they’re not, we’re going to step back, we’re going to go find a different asset that has a nice clean wave, a nice clean trend, and we’re going to move into that.
[00:18:29.160] – Chris
And so I created hierarchy of different assets that I follow. And as you go down the hierarchy, they’re lower volatility, they’re slower moving, and they all have a low or no correlation to each other. So for example, the US stock market to me has got the best opportunity. So the index is like the SP 500 in the Nasdaq. If the stock market is in a bull market and we’ve got a shorter term cycle moving up, we want to be in the stock market all of our money. If it’s going up, that’s the best asset, that’s where we’re going to make the money. Then, of course, we manage those positions. It’s all about managing positions, taking partial profits, moving stops up. When it starts to fizzle out and die, eventually we’ll look down the asset hierarchy to the next one. Anyone can build a hierarchy of the assets that they like. If you’re a precious metals bug, you can build it around precious metals and the dollar and different things like that. But I focus on US indexes, long-yield treasury bonds, the US dollar index, and then a cash position when absolutely nothing is favorable. We just move down that list to whichever asset is providing an uptrend, giving us a clean signal.
[00:19:38.180] – Chris
At any time, if, for example, we’re in the US dollar ETF, but the stock market gives us a buy signal again, we’ll close out that dollar because it’s a low volatility move, and then we want to move all our money back up into the stock market because it’s got lots of opportunity for much more growth. If something comes favorable, hire up the list, we quickly jump to that asset. The whole point is we’re only holding assets going up. Believe it or not, about 30-40 % of the year we’re actually sitting in cash because we just won’t have crystal clear signals. The market is not always trending, and it’s way better to protect your capital than it is to watch it go down. And even when we’re sitting in cash, you can move into an ETF. The symbol is BIL. It’s a 1-3 month Treasury bill note ETF, and you just collect a monthly dividend. So even when we’re sitting in cash and all hell’s breaking loose in the markets, our account keeps going up. And that’s what’s really amazing. 2022 was a very tough year for stocks and bonds. Investors just got taken out to the bushhead and chopped up into pieces.
[00:20:42.710] – Chris
Our account, every couple of months, we just keep going higher and higher because that is the whole point of the strategy, is we’re either profiting from folly markets or we’re sitting on the sidelines. Our strategy has got very low draw downs. It’s got great annual returns on average. That’s what it’s all about, is managing the downside risk and the profits will just naturally come. I want to peel back that onion a little further and get into the strategy.
[00:21:04.820] – Sean
For context, and I want to peel back that onion a little further and get into the strategy. So for context with Tykr, what we do is we look at the fundamentals, we look at over five years. We look at the quarters and the years, that income statement, cash, payment and balance sheet to really see how strong the company is. And then we apply a point system to a higher the point, say, for the stock. And then we look at margin of safety, that potential as well. But a lot of our investors like that strategy because it’s Warren Buffett style. We’re looking for strong, boring businesses usually that generate consistent returns. And in most cases, the really flashy stocks like a few years ago, GameStop and AMC and Costs were all over there. They failed with Flying Colors and Tykr. So a lot of our investors love the value investing approach. We do get a few traders, but not too many. But can you talk about your strategy a little more? Give us the technical details here.
[00:22:03.810] – Chris
Yeah. So just to touch on your fundamental side, fundamentals are, I think, are very, very powerful when you’re in a new bull market. You want to go out and find the fastest growing stocks and all that stuff. I have also found that the way I follow things from a technical standpoint is if you go and you find the market leaders, they also tend to be the ones with really strong fundamentals. The masses love fundamentals, and they typically pile into those. Usually they go hand in hand. The technicals will support the fundamentals and vice versa, sometimes not always at the same time. But fundamentals are very powerful for sure during a bull market. In terms of our strategy, how does it work? I focus on ETFs, exchange traded funds. What we’re doing is we’re looking for wave cycles and money flows in the stock market that happen reoccurring. The market has very wave-like patterns in the market. I look at the stock market, like the SP 500, as the overall barometer. If I know what the stock market is doing, then I know where if my money should be invested in it or if it needs to go to a different asset.
[00:23:10.490] – Chris
When we get into an ETF trade, it might last a couple of weeks to potentially six, seven, eight months long and we ride those trades. They’re pretty long trades. They’re definitely not active, but we’re definitely not just sitting on the sidelines or just letting it sit there and rot. It’s a pretty straightforward strategy and we scale out of trades as they mature. So as they hit certain thresholds, we’ll start to pull some money off the table, move it to a cash position where it collects dividends. The key is that we’re constantly just protecting our capital from any big crashes or draw downs. And when the market has a pullback, that usually resets our signals so we can put the money back into the market after it’s just had a pause or a pullback, usually it’s rejuvenated, ready to go for another leg higher. And that’s what we want, is we want a rally and then a pullback and allows us to keep ratcheting our account in and out of the market. As it starts a new fresh rally, we move back in. But it’s a very straightforward strategy from that regard. We use a market order to enter at the opening bell, which is really straightforward.
[00:24:15.910] – Chris
And we give the targets ahead, most of the targets ahead of time, and we give you the stop. So as soon as you enter the trade or your broker or advisor enters the trade, you can put all those in place and then you can just let the trades run. You don’t have to stress about it. You don’t have to worry about it. And yeah.
[00:24:32.730] – Sean
So what I’m hearing is ETFs, that’s the asset class holding period between I heard here between a couple of weeks, between two weeks and maybe seven or eight months is the average. What returns do you generate with the strategy per year?
[00:24:49.430] – Chris
We average just over 15% a year. Obviously, some years, as you know, are really good. Other years are relatively tough. Since we’ve been having this strategy since 2007, we haven’t had losing year yet. Our best year is about 50 something %. That was the COVID year. That was a huge mover. Volatility does provide a lot of opportunities, so some years are really big. But to me, the most powerful thing is our drawdown. Our biggest drawdown is less than six %, which is super powerful considering the stock market can fall six % in a week. So the way we manage our money and the way we split our portfolio into various sub… Really, we take our one portfolio, we split it down the center, we trade it two strategies. One’s based around the Nasdaq, around growth stock side. They’re ones based around the SP 500. Sometimes half of our portfolio will be at work, sometimes the other half won’t be, or both could be firing on both all cylinders and rocketing higher. But the key is we don’t have these bigdraw downs. We do have users. Well, I don’t really want people. I don’t like people that add leverage.
[00:25:49.690] – Chris
A lot of people will trade the 2X and 3X ETFs and get double or triple our returns. Our draw downs really are still fairly manageable, 10 or 15 % a max drawdown at those levels. So if somebody is really aggressive, they can trade leverage on our strategy. I provide the core. I’m like, if you’ve got a lot of money and you want to protect it and retain your lifestyle, here are the basic strategies. We can grow our wealth, which is 15 % is still huge. So many people think you need to make 50 or 100, which is… It’s not possible with a massive, a big trading account. You get a lot of positions if you had to do that. So I provide the core strategy, and then the users can amplify it to whatever crazy level they want. Some of them trade options to go nuts.
[00:26:38.870] – Sean
So just to revert back to some of the key takeaways: ETFs, holding period two weeks to eight months returns per year about 15 %, drawdown no more than six %. You’re not seeing unrealized losses greater than six %, correct?
[00:26:59.020] – Chris
[00:26:59.740] – Sean
Like that’s highly defensive.
[00:27:01.790] – Chris
It is. That’s what makes it so powerful. Like most people don’t look… If, say, somebody has an advisor and they went and asked their advisor, You’ve got my money invested. What is the max drawdown? The strategy you’ve got my retirement, my life savings into? If the advisor said, Well, you could lose 38 or maybe 50 % of your money, I think most investors would be like, I’m done. Forget it. Take me out. But people don’t realize the risk that they have with the buy and hold. And same with that Tykr. The whole point is these markets, you can navigate them. And if you manage positions, you can do exceptionally well. Buying and holding is for people who know absolutely nothing. They have no idea the risk that they’re putting their money at, the risk of their lifestyle. They are so blind. And then if we go into a big stage four decline, which is like the 2008 financial crisis, the tech bubble in 2000, if we go into one of those again, the majority of investors, they’re like 50 plus right now, and most of the wealth is with them, and they’re near retirement or retired.
[00:28:03.510] – Chris
And if we go into a huge 40, 50 % correction in the markets, most of the investors are going to get completely wiped out who have positions in the stock market. And that’s where I’m really trying to really push. I’m like, That does not have to be the case. You do not have to go through that. You do not need to risk your lifestyle. We worked so hard to live and do what we want to lose it all in your last couple of years. It would be absolutely devastating. And in 2008 financial crisis, the amount of suicides that were done in a study that were directly related to falling stock prices is scary. I mean, this is not just losing money, this is people losing relationships and it’s taking people’s lives. It’s that severe. We even saw that with the Robinhood trader who didn’t understand his options position and how he wasn’t actually down that money. So this is really serious stuff. And all I want to do is try and help as many other people avoid a bear market, benefit from it. When we start a new major bull market or there’s a new financial reset, I want to be able to have investors have the most wealth they’ve ever had so they can reinvest it long term with fundamental companies.
[00:29:11.960] – Chris
They could buy real estate, they could get into businesses. I mean, when we go through a big reset, if you’ve got lots of fresh gun powder, dry capital, the opportunities are endless of what you can invest in for passive income and things like that. And real estate is going to be one of the best things. I mean, it’s as long as you get into like a multifamily, that’s where the consistent best money is. Single-family dwellings, it’s not really the best investment. It’s got to be multiple. Duplex or higher at minimum.
[00:29:41.950] – Sean
Yeah. Let’s take a quick commercial break. Hey, this is Sean. I’d like to say thank you for taking the time to listen to this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for taking the time to listen to this one. I have a quick request. If you have a moment, could you please head over to Apple Podcasts and leave a five-star review? The reason is the more ratings we get and the higher those ratings are, the more Apple will share with the world. So thanks in advance for doing that. And then I have a quick comment. If there are any questions you want me to ask the guests, please head over to our Tykr Facebook group. You can drop a question right there. I’ll go ahead and make a note and I’ll do my best to ask that question on the podcast. All right, back to the show. I want to drill into something because my customers will be like, Sean, what do you think about that comment or that comment? I agree with some things and I do not agree with some things that I just have to have some fun here.
[00:30:34.230] – Sean
Your ETF strategy is sound because we tell people if you’re in wealth building mode, you’re still working, you’ve got a timeline out there to achieve financial independence or retire, stocks are the way to go. We do use the buy and hold strategy, especially for good businesses. You want to buy and then keep buying more. One of my favorite case studies is a guy by the name of Ronald Reed. He was a janitor that built up a portfolio of $8 million. This is on CNBC. It’s so cool. But the strategy was simple: buy and hold strong businesses. He did this through the ’70s, ’80s, and ’90s. He was buying GE and Proctor and Gamble and JPMorgan Chase. It was like, Oh, okay, I get it. Super boring businesses, but I mean, $8 million is nothing to really shy away from. When you’re in wealth protection mode, then we do tell our customers to try to move towards ETFs or index funds. We do talk about the bundled products in one category, ETFs, index funds, and mutual funds. But as you know, mutual funds come with a high expense ratio. So for the same returns, you can pay less if you just go to index funds and ETF.
[00:31:43.960] – Sean
We do like your ETF strategy and we set expectations with our audience. It’s not about the returns. It’s about protecting your wealth. So that I agree with. But I had to say that about our buy and hold is we aim for, so you know, with Tykr, we try to set expectations with our customers. There’s no guarantees here. But year over year, you should be getting between 15 and 50 % consistently because you’re in stocks.
[00:32:09.290] – Chris
Well, for sure, you’re into things that are much more volatile. You generally have to have a whole bunch more positions. You got to be a lot more active. This is what makes the market. You’ve got your beliefs and your strategies that work with your style. I’ve got mine. That is what makes the market. This is where a lot of people actually get confused is the strategy that I run with the ETFs, I wouldn’t say it’s wealth protection mode. A lot of people think because I call it the consistent growth strategy, they’re like, Oh, it’s got to be really protective and it doesn’t have big returns. It’s actually a growth strategy. If you can make 15 % over and over on large accounts, large amounts of money, it’s a growth strategy. It just happens to be very protective of its money. That’s the way I see it. There is that confusion when I talk about ETFs and indexes and bonds, and I say it’s a consistent growth. They think it’s low returns and super defensive. It is defensive, but to me, 15 % return is a monster. Over the last 10 years, it’s two and a half, three times out of the typical 60-40 buy portfolio with a fraction of the drawdown.
[00:33:17.070] – Chris
But that’s what makes the market everybody. There’s somebody who’s always taking the other side of every trade because they think the exact opposite.
[00:33:24.220] – Sean
Yeah. And it’s not like one size fits all. There’s a lot of strategies that work, and there’s a lot that do not work, of course. But yours, it is interesting. And we’ll get into this at the end where people can reach out to you and check out your newsletter. But before we jump into the rapid fire one, what is one key takeaway you can give our audience today, especially those investors looking like they’re brand new, they’re getting into the markets? What would you say to them?
[00:33:54.910] – Chris
Getting into the stock market?
[00:33:56.390] – Sean
[00:33:57.140] – Chris
I would say find a strategy that has a max drawdown, something that you can stomach. I talk to a lot of advisors who use our strategy, and they all say as soon as an investor is down on their entire account, about eight %, they start panicking. They start really starting to wonder. A lot of people see a strategy, it’ll be like 15, 25, 30 % potential draw downs, but it might have these massive returns during a good sweet spot in the market. Just keep in mind, when you lose money, you don’t realize how painful 8 % is, or 10 or 15 % on your entire account is until you get there. It’s way more painful than you think. Most people always put on too big of a position. They don’t know what position size to put on. Then when that particular trade takes a big hit, which is bound to do eventually if you don’t have protective stops in place and things like that, it’s going to do a lot of damage. Look at how much you can lose. Always put in a bit less money than you think because it’s actually still probably more than you actually will be able to stomach if it does go against you.
[00:35:01.740] – Chris
You got to start small, get a feel for something. I wouldn’t say paper trade because paper trade doesn’t give you the real feeling. It’s like playing free poker versus real poker. It’s a totally different game. You do need to play with some money and you need to do some trades and go through the steps. But start small, scale up as you get comfortable. Don’t jump in with two feet, but leaps and bounds, big positions. Really got to ease into it. These markets are designed to pull money out of people’s accounts. The reality is the more you trade, the more you lose. There’s study after study going on to show this. It’s all about being patient, waiting, timing the trade, and then getting involved and actively managing those positions.
[00:35:43.760] – Sean
Right on. Well, good stuff. Next up, rapid-fire round. Let’s dive in. This is the part of the episode where we get to find out who Kris really is. If you can, try to answer each question in 15 seconds or less. You ready?
[00:35:57.290] – Chris
[00:35:58.050] – Sean
What is your favorite podcast?
[00:35:59.580] – Chris
It changes with where I am, what venture I’m working on or what business mode. But right now, my favorite one is Built to Sell by John Wharlow. It’s all about building a business, packaging it up, making sure it runs without you, and getting it scalable. I read that book years ago. I’m more so heavy in it now because I’m working on some other projects. It’s just fun to build a machine that runs and creates that passive income without you. That’s my favorite because it’s all about how these other people have made their businesses run without them and then how much they’ve sold them for.
[00:36:30.210] – Sean
It’s pretty interesting. That’s fun. Yeah. What is a recent book you read and would recommend?
[00:36:37.020] – Chris
I got a couple of them. It’s tough in this course. These changes, time goes on. But one of the most recent ones was Play Bigger by Christopher Lockhead, and there’s a couple other authors. It’s all about category design, creating a category of one, more or less being the only one who does something unique, which is like my asset revesting strategy, the way we rotate through the markets, manage positions. We coined that term as it’s a new style of investing. Another one was Investing in Duplexes, Triplexes and Quads by Larry Loftis. That one I read a long time ago, and that’s what got me so pumped into real estate. I own a lot of different real estate. I built self-storage facilities. I mean, you want passive income, self-storage is the way to go. But those two are critical. I think if you’re an entrepreneur, play bigger. If you don’t read it, you’re missing out on huge opportunity to stand out and just shine in your industry. If you want really passive income without having to learn a lot, you get into multifamily, duplex, triplex, quads or more, that book will set you for life. I’m helping a 16-year-old right now get ready for his… He’s saving up.
[00:37:44.020] – Chris
We’re going through real estate stuff, and he wants to buy his first duplex in two years. He can live in half and have half of it paid for by a tenant. It’s the best way to get started and it’s exciting stuff.
[00:37:56.770] – Sean
That’s cool. What is your favorite movie?
[00:38:00.560] – Chris
I’ve got a few. I mean, I love both Top Guns. The new Top Gun I really like a lot. It’s other people hate it or they love it. I thought it was fabulous. I thought it was maybe even better than the original one, although it’s always tough to beat the original. But I like that style of movie. I also like Battle of Los Angeles, where aliens come in and into the water. I like the Save the Planet, the missions. I’ve always seen myself as one of those characters. And then Battleship, which is very similar to Battle of Los Angeles, where aliens come in and the US, or the whole world is trying to save the world from aliens.
[00:38:34.080] – Sean
Yeah. I’ll give you this. Maverick is awesome. Love it far and above the original. That’s funny you mentioned Battleship. I know it didn’t get the best reviews, but that’s a fun movie.
[00:38:48.130] – Chris
It’s a great movie. I’ve seen it over and over again. My son and I watch it. I don’t know. I just.
[00:38:52.480] – Sean
Love it. It’s great. Yeah, that has never been mentioned on this show before. That’s funny. Good one. All right, we got a few business questions here. What is the worst advice you ever received?
[00:39:05.660] – Chris
That is a tough one. I’m the research king. So I get into all kinds of different things. I’ll research it. I’ll feel like I know just as much as a pro does in a month or two of diving into a whole new topic and thing. I would say you need to do as much research on the topic as possible. Literally every new piece of content you find on it is something you already know. Once you feel like you can’t find anything new, then I think you go and you interview professionals in the field who know it. Then from there, if what they say to do doesn’t feel right in your gut, because nobody knows the situation that you’re in your business or your idea or what you know, if it still doesn’t feel right, you should go with your gut and not take the leap and go with what somebody else has said, because I have hired a lot of professionals in the last few years, and it is unbelievable how unprofessional a lot of so-called professionals are. You got to feel it in the gut. You have to know for sure that you’re comfortable with going into decisions.
[00:40:12.270] – Chris
I wouldn’t say I’ve had… I can’t really select what’s the worst advice I’ve ever had, but I would just say do a ton of work. Don’t lean on somebody for just an answer. Don’t hire just a pro and get a quick answer. You really have to put in the work. Just like any entrepreneur, you got to work endlessly push, push and grind for the answer. Then once you think you’ve got it already figured out, you go and you consult with a couple of experts, get a couple opinions, and then you take that information and create your own unique strategy. I would say don’t take advice from just one person.
[00:40:46.140] – Sean
Yeah, I was going to draw… Okay, so the takeaways don’t, again, I was going to say exactly that, don’t take advice from just one person. I like your tiered approach there. You start with your own homework, and we’re going to take this longer than 15 seconds. So people get into analysis, paralysis mode, and they never get off the bench and in the game, and they sit there for months and years. There’s only so much you get. You got to time box it. You’re going to be like, all right, I’m going to take the next two weeks or one month, and I’m going to go all in. And if I can’t find any things that says no, this is something you should not do, then hey, you can check that box. Then you move on to your professional interviews. Do that for two weeks to a month. Get the information, move on. I’m big on time. I’m big-time boxing because…
[00:41:32.450] – Chris
Yeah, analysis process. I love setting deadlines.
[00:41:34.740] – Sean
Yeah. You got to do it by the state, Sean. I’ll tell myself that. You got to get it done by the state. That’s it.
[00:41:42.320] – Chris
[00:41:42.830] – Sean
All right, flip that equation. What’s the best advice you ever received?
[00:41:46.580] – Chris
I think the best advice, it was… I mean, my parents have always been really good. They’re always like, do something that you’re passionate about that you want to do. I read a book in college called Do What You Love and the Money Will Follow. It was from, I don’t know what the lady’s name was. I ended up actually talking to her on the phone once. I wanted to get together and meet with her. But if you do what you love, which for me has always been the analysis, the stock markets, I just live and breathe it. I love it. It does not feel like work. When I go to work and I get up sometimes, I’m fired up. And I love what I do. It doesn’t feel like work. So I think the best advice would be to find something that you’re passionate about and focus on that. And the real key here, I think the biggest takeaway is actually find a way to leverage what you love doing. For example, I can do a morning video for my subscribers, and more or less it’s resold thousands of times. I do that piece of work once.
[00:42:42.500] – Chris
I use it to create a course and it can be sold for years. Whatever you’re passionate about, find a way so that it doesn’t suck the life out of you, but it can run without you or be highly leveraged. It’s huge return, which makes things a lot more fun. Just focus on something that you can have fun with and be highly successful. It’s so much fun to be successful. You don’t want to be a slave to your passion because then it turns into, and I’ve done this. I took a hobby sport, kiteboarding, created my own line of kites. Then I’m like, Oh, my gosh, I absolutely do not. I hate this. I’ve ruined my favorite hobby, my favorite sport. I just mothballed it and I never launched it because I didn’t want to go through that. It ruined it.
[00:43:24.700] – Sean
I found that if you do something you love and you can create some leverage around it 100%, then it becomes a ton of fun. I had a service business in the late 2000s building software for businesses and doing marketing. That was hard work, and I hated it. I hated it so much. I was like, Never doing that again. All right, one more question here. This is a time-machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?
[00:43:55.900] – Chris
Yes. Well, I feel the pain more now in the last couple of years when it comes to real estate. You see how much it has skyrocketed. So I would go back to probably the age of 24. I got married. We bought a first home. And I remember having two other properties just down the street that I wanted to buy. And I don’t know, I generally don’t like to ask for help. I’m like, I’m going to learn it. I’m going to do it. It’s just who I am. And I had to sell my Honda Civic at the time. If I could sell my Honda Civic before I had to release the the conditions on the house, I was going to buy the house. I couldn’t sell my Honda Civic in time. I sold it literally the day after it closed and then somebody else had bought the apartment that I wanted to buy. But I would go back then and I would have I would have asked for advice. I would have gone to my parents. I would have gone to somebody and say, Hey, can I borrow some money temporarily? I’d like to buy this house or this rental property.
[00:44:53.910] – Chris
If I could just go back then and have read that book about tries and quads and duplexes, I’d have an extra two properties now, probably another million and a half just floating around with free income for the rest of my life. If I could go back, I’d just say, buy another home. Never sell it. Make sure it’s something that the numbers work well.
[00:45:19.000] – Sean
Right on. Yeah, great advice. All right. And where can the audience reach you? I’m going to be specific here. If they want to check out the signals, what you’re doing, where should they go?
[00:45:29.400] – Chris
They can go to thetechnicaltraders. Com. And if they go there, they can cruise around. They can see all kinds of stuff I’ve done, provide a lot of free content and articles. But it’s all explained there. There’s videos on there that’ll walk you through what I do, what we’ve talked about here in greater detail with visuals, obviously, of the charts and things like that. Or they can even get my book, Asset Revesting on Amazon. And that gives you all the charts and all the details. It’s a short read. It’s only about 120 pages, and it’ll really fill you in on this angle, the pros and cons of different styles of investing, and how asset revesting fits uniquely in between all the current styles that are out there.
[00:46:12.820] – Sean
Awesome. Well, thank you so much for your time, Chris. This is great.
[00:46:16.120] – Chris
Hey, thanks, Sean. It was a pleasure.
[00:46:17.410] – Sean
We’ll see you.
[00:46:18.330] – Chris
[00:46:18.950] – Sean
Care. Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple Podcast and leave a review? The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision-based solely on what you hear. All right, thanks for your time. I’ll talk to you later. See you.