High Risk? No! Smart Risk

Just follow these three rules. [Total Wealth] BROUGHT TO YOU BY MANWARD PRESS Three Rules for High-Risk, High-Reward Investing [Robert Ross] Robert Ross Speculative Assets Specialist The high-risk, high-reward investing landscape is quickly evolving. Are you ready for it? Last week's market moves - surging small caps and crashing tech - serve as a stark reminder of both the potential and pitfalls in this arena. That's why it's crucial investors balance the allure of outsized returns with the need for prudent risk management. Here's how to do it... SPONSORED [The Mysterious VC Firm Behind Nvidia's Secret Weapon]( [Businessman in black suit]( In 1999, Sutter Hill Ventures made a bold bet on Nvidia before anyone had heard of it. Now, they're going all-in on Nvidia's hush-hush partner that's powering their new Blackwell chip. Discover the little-known company that's attracting massive investments from the visionaries behind Nvidia's 100,000% rise. [Unlock the hidden key to AI's future.]( There isn't a one-size-fits-all answer to that question. While I have a handful of indicators I watch for crypto ([which you can read about here]( they are very different from the indicators I watch for small cap stocks. But regardless of what high-risk investment you're looking at, you should have a few guidelines to make sure you're taking on “smart risk.” Rule No. 1: Be Tough on Your Losers It's safe to say you're reading this newsletter to learn how to make money... Which is why what I'm about to say is going to sound very strange. Making money should not be your main goal. Instead, not losing money should be your aim... because if you keep your losses small, the upside will take care of itself. And that's especially true with high-risk, high-reward investments. For instance, the table below shows that as your losses increase, the gains required in order to break even increase exponentially... [Losses Increase - Gains Needed Increases to Breakeven]( [View larger image]( The more you lose, the less favorable the math gets. If a position in your portfolio falls by 50%, that position needs to rise 100% for you to break even. And if a portfolio position falls 90%, you need to make a 900% gain to get back your initial investment. This is why minimizing losses is so important. It's a key reason I tend to sell any position that falls 35% or more. If you can avoid big losses, you can avoid needing big gains just to break even. SPONSORED [Amazon's $794M Bombshell: Nvidia's Secret Partner Revealed]( [Seattle Spheres on May 2018]( Amazon has quietly poured $144 million into a secretive AI chip company, and committed to buying a staggering $650 million of their product. Why? Because this obscure startup holds the key to unleashing the full potential of Nvidia's revolutionary Blackwell chip. [Discover the company at the heart of the AI arms race.]( Rule No. 2: Risk a Little (to Make a Lot) As you likely know, I published a book called A Beginner's Guide to High-Risk, High-Reward Investing. While many people expect this book to be all about trading tactics and my “secret sauce,” they're often surprised to find it's mostly a risk management book. One reason I took this approach is I got hundreds of notes in 2021 and 2022 from people who did not know how to use high-risk strategies effectively. They'd buy options or get into a high-risk investment like a new “altcoin” without any regard for how they'd manage their risk. The fact is... high-risk investments should make up a small percentage of your total portfolio. While everyone has different risk tolerances and investing goals, the key to high-risk, high-reward investing is to risk a small amount of capital to make a lot of money. Most of the time, your trade will be a loser - sometimes even 9 times out of 10. But the goal is to make up for those incremental losses (and then some) with a big winner. This is a strategy I've used in my own investing portfolio for years with lots of success. And that brings us to our third rule... SPONSORED [Nvidia's Secret Partner... This Is The New AI Chip Powerhouse]( [Chatbot conversation]( I bet you've never heard of it... but this newly public company is set to become key to Nvidia's seat on the AI throne. And for now... you can get in while it's still cheap. [Details Here!]( Rule No. 3: Pick the Right Horse This part is a little harder to summarize in a few hundred words (which is why I published a 250-page book on the topic). But overall, the goal should be to stick with the highest-quality assets in every high-risk sector. This means that instead of speculating on an unknown altcoin you heard about from a co-worker, you should hold time-tested cryptocurrencies like Bitcoin and Ethereum. It also means that instead of trading options contracts that expire at the end of the day, you should stick with long-term equity anticipation securities, or LEAPS, on strong large cap companies that are growing their earnings. And instead of buying a tiny pre-revenue microcap stock, you should stick with small caps that are massively growing their sales but are flying under investors' radars. High-risk, high-reward investing is not for everyone. And I understand some not wanting to jump in for fear of getting burned. But my goal is to help investors of all stripes use these strategies in a way that doesn't set them back from achieving their long-term investing goals if they take a few losses. And when the setups are as favorable as they are right now, it's a great time to take a small percentage of your portfolio and try to turn it into a larger percentage of your profits. Stay safe out there, Robert Want more content like this? [YES]( [NO]( Robert Ross Robert Ross' unique style of clear and direct stock analysis has helped him build a massive following in the investment research industry. He started his career at investment research company Mauldin Economics, where he quickly rose through the ranks to become one of the youngest chief analysts in the industry. Today, over a million investors turn to Robert every month for his take on investing, economics and personal finance. He now shares his unique insights in Total Wealth and Manward Money Report. You are receiving this email because you subscribed to Total Wealth. To unsubscribe from Total Wealth, [click here](. Need help with your account? [Click here](. Have a question or comment for the editor? [Click here](mailto:mailbag@manwardpress.com). Please do not reply to this email as it goes to an unmonitored inbox. 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