HOW ANYONE CAN BE

A Successful INVESTOR

Protecting Your Investments

1

Who Is This Presentation For?

1. People who like SIMPLE

2. People who know little to nothing about the stock market or investing

3. People who don’t care to know anything more about the stock market because

4. They have better things to do than worry about something like the stock market that they know they can not control

2

Who Is This Presentation For?

4. People who want their money to go to work for them

5. People who don’t want the worry of losing unknown amounts of money but

6. Want to earn the best possible Rate of Return

3

“Successful Investing Requires Simply Managing Risk,

Not Spending Countless Hours Chasing Returns”

4

How Can A Person

Who Knows Little About the Stock Market

Be Successful And Feel Safe?

5

3 Simple Nuggets To Know

I. The Stock Market Will Go Up and or Down at Any Time - There Is Nothing You Can Do To Control It!

II. The Stock Market Has Increased 84 Out Of The Past 114 Years (1900-2013).

III. It is Better To Be in a Position to Make Money Than in a Position to Lose Money.

6

What You Need To Know How To Do

Can I use a computer or smart phone

I can add, subtract and divide with a calculator

I can keep a calendar and set reminders

I can follow through with my commitments

7

Let’s Dive In

First You Need to Open An Investment Account

8

Strategy #1

• Own The Biggest Companies in The United State of America

9

Own the 500 of the Largest Companies

In the United States of America

How to Do This And Protect Yourself from Market Crashes

• Step 1(A) – Invest 95% Of Your Portfolio Into The Stock Ticker Symbol “SPY”o This is a stock that holds the 500 companies that make up

the S&P 500

o It is well diversified

o However, it has been known to drop by more than 50% from time to time….

10

How to Do This And Protect Yourself from Market Crashes

• Step 1 (b) – Determine a Percentage of money that you could lose that would still let you sleep at night.o For example, between 5-10% in any 3 month period.

o We will assume you determined 10% was the most you wanted to lose.

11

How to Do This And Protect Yourself from Market Crashes

• Step 2 – Protect Yourself by Setting the Maximum Amount You Could Lose If The Stock Market Tankso By Investing some of the other money into “Put

Option Contracts”

o A Contract that gives you the right to buy shares at a predetermined price that for you will be lower than the current price you bought your SPY shares for

o If the market tanks and takes the value of your shares down with it, your put option contracts lock in a price so that you can sell shares and get your money back!

12

Example

• Assume you have a little more than $52,500 to invest on January 1

• The price of SPY is $100 the day you are investing – You buy 500 shares for $50,000 (about 95% of your money.)

• You don’t want to loose more than 10% in the next 3 months

• You purchase contracts that allow you to sell your stock for $90 on or before March 20th if its price falls below that.

• The price of these 5 contract (100 shares each) is $400.

• The Put Option Acts Like an Insurance Policy on Your Investment.

13

Continued

• March 20th Roles around:

o Scenario A: The Stock Market Went up 3%.

o Scenario B: The Stock Market Plummeted 20% for a reason Beyond Your Control

14

Scenario A

• Your Put Option Contract Expires and It has No Value – You Lost $400.

• Your Stocks Increased in Value $3.00 Each Share – You made $1,500

• You received a dividend during the quarter of $.50/share – You made another $250

15

Your Total Profit Was $1,350!

Scenario BThe Stock Market Plummeted 20%

• The Shares of Stock You Own Are Worth $80 per Share – You Lost $10,000!

• However, The Put Options You Bought Allow You To “Sell Shares” for $90 Each – You Get $5,000 Back

• You also received a $.50 dividend - $250

• Instead of loosing $9,750 you only lost $5,150.

16

What if the Stock Market Plummeted More

• Even if the market plummets down 99%, the put option contracts you buy give you the ability to sell at $90!

• You couldn’t loose more than the amount you were willing to lose.

• The money provided by your put options allow you to “Sell High and Buy Low” through rebalancing.

• It is that simple!

17

Strategy #2

• Buy the Right to the Gains of the S&P 500 without owning the stock

o This is accomplished by using a small part of your investment portfolio to buy “Long Call Options”

o The rest of your portfolio is invested in securities that are safer to provide a small income to by for the cost of the Call option.

18

The “Really Safe” and “Really Risky” Strategy

Buy Call Options On The S&P 500

• There is an unlimited upside potential when the S&P 500 increases in value because the options soars.

• There is limited downside – Mostly from the options expiring without if the stock market tumbles.

19

How to Do This

• Step 1 – Invest 80-95% of your nest egg into a safe fixed income portfolio. o This is the safe money – the remainder will be used to propel your portfolio

higher but could be lost if the stock market tumbles

o The fixed income portfolio includes bonds, preferred stocks, limited partnerships, real estate trusts and business development companies.

20

Step 2

• Buy “Long Call Options” on the S&P 500o Gives you the right to buy shares in the future at a predetermined price

• If Shares of the stock increase past your predetermined price, you make money.

• If shares decrease below that predetermined price, it would be due to the fact that the stock market fell

• Your losses are mostly limited to the 15-5% you have invested in the option contracts.

21

In 2013 – 52% for 10 minutes of work!

How Much Does This Cost?

22

Less than $100 Year

Little Money For Wall StreetMore Money For You!

More Information

• These are 2 Simple Strategies That Can Make a Giant Impact on Your Net Worth.

• Simple for anyone to do.

• Don't be Scared of Stock Options

• Used Correctly they can reduce risk and increase returns

There are many more option strategies you can learn at Option income systems.

23

24

www.KevinWenke.com