When Will They Learn, There Is No Free Lunch?

With the recent collapse of FTX, investors of all types are learning that nothing in life is free and that there is always a price. Unfortunately, not just the wealthy got burned but also some retail investors who had more invested in speculative assets than they should have. It is amazing how many people are drawn to investments that promise instant wealth, but then again, many people do play the lottery. However, most people who invest in lottery tickets, at least, seem to limit the amount invested to something reasonable. Many celebrities were tied to FTX like Stephen Curry, Tom Brady, and tennis star Naomi Osaka, to name a few. Curry, who took an equity stake in the company is likely to take significant losses on his investment. What is going to happen to the Miami Heat’s sponsorship deal with FTX? Will the Heat immediately rename the arena or continue calling its stadium FTX arena? The power of marketing is amazing, but just because it glitters does not mean it is gold. Investors should always do their research.

With mounting lawsuits against celebrity endorsers of FTX, the real losers are those retail investors who were overexposed and invested too much in crypto currencies due to the heavy endorsement by multiple ultra-famous celebrities. We can not emphasize enough the need for simple solutions when it comes to investing your hard-earned dollars no matter how wealthy you are or what type of organization you represent. Many of you are familiar with the phrase “keep it simple, stupid” and that phrase should probably be top of mind for the average retail investor. Long before the collapse of FTX, Charlie Munger called crypto currencies a bad combination of fraud and deception. For most retail investors, it is probably better to invest in something that you truly understand. Simply creating a currency out of thin air and selling it to the highest bidder is probably not something most investors should be a part of unless you are the creator of the crypto. But as FTX discovered, currency creation also comes with risks.

All forms of investments come with risk and those that have the least amount of risk generally have lower return expectations. As an investor, you can rely on your own skill set to create a great investment strategy or you can rely on someone else’s skill set as a source for your investment ideas. In either case, you need to be able to understand exactly why the investment approach you choose to employ will work. Here at Investoristics, we know exactly how and why our strategy works and would be happy to share all of the details. Fortunately, most of our strategy details are shared on our website. As we have said before, our strategy is simple but not easy. So, if you are looking to invest in the stock market our investment approach is certainly one that you need to consider.

Building wealth as quickly as possible may not be the goal of all investors but doing so requires concentrated investments in a single or multiple strategies that are superior to any index fund investment. Our approach provides significantly higher returns than the overall market and comes with a lot less risk. Investing in quality businesses with the requisite value and financial strength is the foundation of our approach. Sleep better at night knowing that your investments will be there when you need them. If you want to find out more about our investment strategy, please contact us at your earliest opportunity.