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Eric Seto
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Here's how monthly passive income makes money while the market loses money
Dec '22 (edited) in Monthly passive income
Here's how monthly passive income makes money while the market loses money
For the last week or two, the market tanked because of interest rate increases. But I still made 11% from this blue chip stock below.
Most of the regular investors would lose money. My long term investing strategy would lose money.
That's right. This is because there are 3 types of investing strategies in the world:
1. Directional
2. Market neutral
3. Event driven
Direction is what most of us know. Buy and hold. Hoping the price goes up.
But the problem is - prices don't go up all the time
Event-driven is like M&A, and acquisitions. These opportunities are limited and usually can only be initiated by private equity funds. So that's out of the question.
The last one is - market neutral.
This is where hedge funds can exploit inefficiencies in the market by haing both long and short positions.
That's what my monthly passive income strategy is (mostly Market Neutral Strategy).
The benefit of market neutral strategy is that even if the market doesn't go up, you can still make money.
Apple went down 8% in 36 days but I still make 11%.
Here's my recent profitable exit:
AAPL (Nov 10 - Dec 16: 36 days)
Price movement: from $147 to $134 (-8%) if only using shares
Advance monthly passive income gain: +11.60%
If you want to learn more about monthly passive income investing, comment "MPI" below
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Investment & Retirement Strategies for busy full-time professionals. Long-term investing & Monthly Passive income ideas.
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