As the year winds down and as we are coming to an end, I like to look back, reflect on what went well this year and what could have gone better. Based on this, I will adjust my plans going into 2022.
So this is part 1 of 2 lessons, with this first being “The 9 Lessons I Learned About Trading, Investing, and Life” and how I will use these lessons that I have learned to actually go into 2022.
Now what I’ve done here is that I prepared a checklist that I thought would be fun to share with you.
So let’s get started with the nine lessons that I have learned, starting with the first three, and these first three lessons are what I learned about trading.
Lessons I Learned About Trading
Lesson 1: Trade Value Stocks, NOT Growth Stocks
The first lesson that I already knew but I violated earlier this year is that when trading The Wheel, I want to trade value stocks not growth stocks.
What does this mean? This applies mainly to trading the Wheel. I want to make sure that I am trading stocks that actually are already making a profit. This is usually value stocks, not growth stocks.
And as you know, there is this one stock in my portfolio that is hurting me really, really badly. This trade was with RIDE, and yes, RIDE has been my nemesis.
So RIDE is a trade that I entered in February earlier this year. What happened is I thought it was time to put a growth stock into the portfolio. You see, when you’re trading value stocks, it’s kind of boring. But when it comes to trading, boring is good.
And for those of you who’ve been following me a while, you know this story. I was stuck in Florida when we had the ice storm here in Texas, I was there with my kids because we were at a sailing regatta.
I was stuck in the RV that I took down there to Florida, and this is when I was bored. And this is NEVER a good idea. And of course, I know better and it is hurting me badly.
So this is another big, big, big, big lesson for this year to write down once again to make sure that it’s in my 2022 plan in big, bold, fat red letters blinking on the screen.
For those of you who’ve been following me for a while, you know that I trade The PowerX Strategy as well as The Wheel Strategy.
If you would like to learn more about the PowerX Strategy, I did a video where I discuss this strategy in detail that you can watch HERE. If you would like to learn more about The Wheel Strategy, you can check out a video I did about this strategy HERE.
Now, this was lesson number one, let’s talk now about lesson number two.
Lesson 2: Don’t Force Trades
This is also something that I have known for a long time, but sometimes it helps to reinforce some of the good old rules that I already know.
Lesson number two is don’t force trades.
I want to tell you a little bit of a story about what is behind this. As some of you know, at the beginning of the year, I decided I would share my trading account publicly so you can follow along with what I do.
At the beginning of the year, I put $250,000 in cash into a trading account. This is a margin account, which gives me $500,000 in stock buying power, with the goal of trading for a living to make $15,000 per month, $180,000 per year.
January started off super strong. Instead of making only $15,000, I made over $21,000. In February, I decided to turn it up a notch. This is where I actually entered this dreadful RIDE trade that you might have heard about.
So this is where I violated my rule of only trading value stocks and forced this trade. When you’re trading, sometimes the stocks that you are looking for are not appearing on the scanner.
We had one of these periods in October, but in October I was already much, much better. Way more disciplined here of only taking value stocks and not being lured into growth stocks or even forcing trades.
It is all about being patient and waiting for the right opportunities to come along.
Don’t force trades. Be patient.
Let’s move on to number three, and let’s talk about the third thing that I have learned when it comes to trading.
Lesson 3: Non of Us Is As Smart As We Are All Together
None of us is as smart as we are all together. I’ll explain in a moment what I mean by that.
Some of you may know, we have a private community of traders here at Rockwell. These are the traders that have the PowerX Optimizer, and they are following The PowerX Strategy and The Wheel Strategy.
I want to share a few examples with you. What I’ve learned this year is that it’s great to keep expanding your horizon, to keep looking for other trades.
I mean, I would be stupid if I just sick with the idea that I just trade the way I have always traded.
One of the traders in our community is Kurt, and Kurt had this crazy idea about kamikaze calls strategies. Now, this isn’t anything that I like to trade, but it is an interesting trading idea.
Kurt has created a whole document around this, and some traders took this idea and thought it looked good, and it made sense.
We also had Pavol originally coming up with a “repair strategy,” and this is where he and members in this community here, who already have the PowerX Optimizer, decided to take this to the next level.
Now, Mark and I have tested this repair trade strategy quite extensively. We didn’t initially like it in its original form, but we came up with the adjusted repair trade, the ATR.
It’s one of the trades that I did on LVS where I was able to just risk $10 with the potential to make $400, $800, or $1,200 while I am stuck in the trade. Super cool, and interesting idea here.
But there are more great ideas that I have incorporated into our trading.
One of them is “The Wheely Strategy,” and this idea is originally from our Mastermind member Evghenii.
He had a genius idea that Mark and I tested extensively. Right now, Mark is trading this strategy quite actively.
For me personally, I’m very intrigued by this and I will incorporate it into my trading plan for 2022, but we’ll talk about this in another article.
One more thing that I want to mention here is Jan’s indicator (pronounced Yan). We have the TradingView lowest Close Indicator, which we lovingly call “Jan’s indicator” because he had some genius ideas here.
I have been using this indicator here for quite a while. And as you know, we have already implemented a basic version of this into our PowerX Optimizer.
So this is where, as we are going back and looking at the three things that I have learned when it comes to trading, is none of us is as smart as we are all together as a community.
In an upcoming article, I will show you exactly how I plan to adjust my trading plan for 2022. I already made a few adjustments, and I’ll show you how exactly I’m planning to trade.
Lessons I Learned About Investing
Now I will talk a little bit about investing because this is where I have learned three lessons this year that I think might be interesting for you.
Going into 2022, you will see me focusing more on investing, as well as trading.
Lesson 4: Think WAY More Ahead For Investing Opportunities
One of the things that I’ve learned is that I have to think ahead more for investing opportunities.
What do I mean by this? This where we had the pandemic hitting us mainly last year in 2020.
In the beginning of the year, I thought the COVID pandemic must have hit landlords, right? Since it must have hit apartment complexes, there might be an opportunity for me to buy some.
No. In fact, prices were going up like crazy, and in the beginning of the year, I sold one of my apartment complexes.
Then I thought, what other industry could be hit here by the pandemic? Maybe vacation resorts? So I started looking at vacation resorts that I wanted to invest in. But no, several others also had this idea. They got snapped up in days.
Next I thought, maybe luxury villas for Airbnb. No, it’s the same here, it gets snapped up in days.
And if you have been following the chart of Airbnb, it’s just crazy. What does this mean? You can’t go with the stuff that is too obvious, and I think this is what I was here, Captain Obvious.
Now I have two other investment ideas.
One of them I’m pursuing very actively right now, I’ve already shared it with our Mastermind members. This is an idea that I will share with you as I have invested. If I’m doing this right now I think that some of you might actually drive up the competition for me.
Another thing when talking about thinking way ahead for investment opportunities that will be on my agenda for next year is NFTs and the Metaverse.
You may be thinking I’m already way too late there, but I think we’re still in the beginning. It’s almost like cryptocurrencies.
You see, with cryptocurrencies, I didn’t take that seriously many, many years ago when bitcoin was still trading at $10, $100, or even $1,000.
This is when I thought cryptocurrencies would never take off, but I’m getting smarter here now. I don’t think that the opportunity in cryptocurrencies is gone, but I believe that when we are looking at NFTs and the Metaverse, that there will be way more opportunities.
This is kind of like teaching an old dog new tricks. I was resisting NTFs, the Metaverse and cryptocurrencies for the longest time. Now knowing what I’ve learned this year, I will embrace it as we are going into the next year.
Lesson 5: Be Smarter With “Parking Money”
Let’s talk about another lesson regarding investing. I have learned that I need to be much smarter with “parking money.” What do I mean by this?
While I was waiting for investment opportunities, I had a few million dollars earmarked for new investment opportunities, and I “parked” it in my checking account. This is the worst place to park money at, right?
It has been sitting there for many months, for most of the year in fact. This, of course, is not smart at all. Going into the new year I will come up with strategies where I have money parked for a timeframe, I want to say three to six months.
This will be a timeframe while I’m waiting for an opportunity to invest, because you want to be somewhat liquid. You don’t want to have everything in a trading account.
In a trading account, regardless of what you are trading, whether you’re trading the PowerX Strategy or The Wheel Strategy, you might be stuck in a stock, no matter how good you are.
This is where you want to make sure that you have an account where you can quickly take money out for an investment opportunity as needed.
One of the things that I have been looking into, and have shared with our Mastermind members, is that I will look more into a dividend strategy.
Now, this is not really trading here for income or for growth. This is more for parking money for the short term. But while you’re parking money, you might as well try to make maybe around 12-15 % while it’s “parked.”
This is one of the lessons that I’ve learned because I have had money sitting in my checking account for way too long.
Lesson 6: Take Investing As Seriously As I Take Trading
I need to take investing as seriously as I take trading, and here’s why.
I’m a super active trader. I spend an hour easily every day looking at the markets. And you know what, if I would spend an hour per day on my new investing idea, it would already be done.
This is where I just need to get better with my time management because I have brushed aside investing. For me, investing was more about generating passive income.
This is why I have been invested in real estate and owned apartment complexes. I now have a few other opportunities that I want to pursue, and all I need to do is take it as seriously here as trading.
Lessons I Learned About Life
All right, let’s move on to lessons about life. These lessons are reinforcing some of the things that I already knew, and I hope that this might help you as well.
Lesson 7: Surround Yourself With Positive People
Surround yourself with positive people. You are the sum of the five people you spend most of the time with.
If the five people you spend most of the time with are overweight, there’s a good chance that you might be overweight, or become overweight.
If the five people that you’re surrounding yourself with and spending the most time with are extremely wealthy and millionaires, there’s a good chance that you’re becoming a millionaire as well.
This year I’ve learned that negative people suck the energy out of me. It is just crazy. Going back to our community, I love it because it’s super positive.
A few days ago we did a toy drive for Toys for Tots, and look at this. This is a picture that Debbie, our CEO took.
We donated a lot of toys together with your help. I personally bought a lot of toys and personally delivered them to Toys for Tots. We were able to help more than 300 kids. I appreciate you getting involved to make it such a big success.
I am so thankful to have not only this community, but also those of you on my Youtube channel, and those who read these articles. One of the things that I’ve learned this year is that negative people only have words where they try to bring you down, right?
Positive people change the world through actions. Isn’t that true? This is where actions, not words, make a difference. Negative people just talk about thinks like, “You should have done this better, and you should have gotten out of RIDE there, and you should have never gotten into RIDE.”
I know that, yes, captain obvious, right? Just take action.
Let’s talk about the last two things that I have learned about trading, investing, and life in general.
Lesson 8: Kids Get Older and It Sucks
So here is another thing that I’ve learned, especially this year, and it has hit me harder than ever. And this is kids get older and it sucks.
Now, as I’m 52 years old, it seems that I am one of these older people who always say, “I wish I had spent more time with my kids, with my family.”
Just recently I came across this picture that was taken only nine years ago. This is when the kids and I were going to Germany to visit my parents. My son Julius is on the left, my daughter Vivian on the right.
Now look at this.
This is my son Julius right now. He’s now is in college. In autumn I drove him up to Boston, where he is attending college. He’s out of the house, and for me, this is tough.
My daughter Vivian is also growing up. That’s her right now, only nine years older. She is a junior in high school.
We just spent the weekend together in St. Petersburg, where Vivian and her sailing team were competing in an International Sailing Regatta. And yes, they made first place, so a proud daddy moment here.
Going into next year, think about it this way. You can always make more money, but you can’t get back time.
And this is one of the things that I will put big and fat on my computer desktop so that I see it every single day so I’m not missing the most important things in life.
Lesson 9: Be More Realistic with Time and What I Can Accomplish
For me personally, I need to be more realistic with time, since we are talking about time, and what I can accomplish.
Because here’s the deal. You know that I am an overachiever. I want to have everything and get everything done right now.
Here’s a Bill Gates quote that really resonates with me right now.
Bill Gates said, “Most people overestimate what they can do in one year and underestimate what they can do in 10 years.”
Personally, I tend to overestimate what I can do in a day and even a week. I need to be a little bit more realistic and have monthly, quarterly, and annual oriented goals.
I don’t believe I need to have a 10-year goal. For me, life goes too fast, but I need to get better in my time management and not put too much on my plate and try to get too much done in too little time.
I don’t know about you, when I try to do this, that’s when I stumble. And this basically brings us back full circle here. Because if I’m trying to do too many things, this is when I am being impatient.
These lessons are what I’ve learned this year. Not only in life, but in trading and investing as well. You can’t really turn a $1,000 account into a million dollars within a month, right?
But over time, when you apply the principles you might have learned by reading these articles about creating SRC profits (systematic, repeatable, and consistent), your financial goal becomes more realistic.
There you have it. These are the 9 major lessons that I learned in 2021 broken down into trading, investing, and life.
In the coming months you’ll see exactly how I will incorporate these life lessons into not only my trading plan, but also my investment plan and life plan for 2022.