BIO: Chris Vermeulen shares a different way of investing that doesn’t use diversification or the buy-and-hold method. In his new book, “Asset Revesting – How To Exclusively Hold Assets Rising In Value, Profit During Bear Markets, And Continue Building Wealth In Retirement,” he explains why this approach is the way forward.
STORY: Chris and his father imported infrared saunas from China only to discover they were not certified in Canada after arrival. Chris had invested over $250,000 that went down the drain.
LEARNING: Find what you’re passionate about. Invest in what you’re familiar with. Start small, test things out, and then go big.
“You might not make as much doing something you’re passionate about, but if you’re a creative person, you’ll find a way to make it work and eventually become highly successful.”
Chris Vermeulen shares a different way of investing that doesn’t use diversification or the buy-and-hold method. In his new book, “Asset Revesting – How To Exclusively Hold Assets Rising In Value, Profit During Bear Markets, And Continue Building Wealth In Retirement,” he explains why this approach is the way forward. He believes that investing should be about capital preservation first and growth second. By doing this, there will always be capital to invest and consistent account growth.
With over 25 years of investment experience and data working with 20,000 self-directed investors, Chris is confident that this will become the new industry standard investment model.
Worst investment ever
Chris made enough money in the last year of college trading. Since his parents paid for his college education, he was debt-free and could start investing immediately after college. His dad happened to be helping a friend who was selling generators. The guy was importing them into the country.
He suggested to his dad to buy these same generators from China. They flew to China and went to the Canton World Fair, where there were over 40,000 products and manufacturers of everything you can imagine. They’d visit the warehouses daily, and every time they saw a product they liked, they’d take the pamphlet and keep it. At the night’s end, they’d sort the brochures into yes, no, and maybes. They did this for four days.
Eventually, they came across infrared saunas; at the time, no one was selling them in Canada. They put in a big order. Chris borrowed $250,000, ready to take over the world.
When the products arrived in Canada months later, they set one up and realized they had more or less been scammed. The products weren’t certified by the Canadian Electrical Code. The Canadian Electrical Safety Authority came, checked them out, and refused to approve them. They had to put the products in the dump and pay to get rid of them, making a complete loss. It took them over a year and a half to get the next batch of products that were actually certified.
- Find what you’re passionate about.
- Invest in what you’re familiar with.
- Start small, test things out, and then go big.
Do something you’re passionate about because, eventually, you’ll run into tough times. You only have to be really good at one thing, and you can be as wealthy as you could ever imagine—if you can help enough people with whatever product or something you’re good at.
Chris recommends reading Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets. The book teaches the four stages that the stock market goes through, how to identify the stages, and the strategy to use for each. If you understand these stages, you can apply that to whatever you’re investing in.
No.1 goal for the next 12 months
Chris’s number one goal for the next 12 months is to preserve capital.
“Protect your capital. Don’t get caught up thinking stocks are the only asset available, and buy a bunch of them. There are many more things out there to invest in.”
Andrew Stotz 00:02
Hello fellow risk takers, and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives. Thank you for joining that mission today. Velo risk takers this is your words podcast hosts Andrew Stotz, from a Stotz Academy, and I'm here with featured guest, Chris Vermeulen. Chris, are you ready to join the mission?
Chris Vermeulen 00:38
You bet, Andrew, let's rock and roll.
Andrew Stotz 00:39
I am ready. So let me introduce you to the audience. Chris shares a different way of investing that doesn't use diversification, or the buy and hold method in Chris's new book asset, reinvesting how to exclusively hold assets rising and value, profit during bear markets, and continue building wealth in retirement, he explains why this approach is the way forward, he believes that investing should be about capital preservation first and growth. Second, by doing this, there will always be capital to invest and consistent account growth. With over 25 years of investment experience and data working with 20,000 Self Directed investors, Chris is confident that this method will become the new industry standard investment model. My goodness, Chris, take a minute and tell us about the unique value you are bringing to this wonderful world.
Chris Vermeulen 01:38
sure where to start? Yeah, well, I mean, from a really high level, you know, there's value in all kinds of different areas really comes down to you know, what you focus on who you are, what you're doing, where you're going to pull value out of this conversation. But from a really high level, the value that I think I bring to a lot of investors is for them to see the investment world in a very, very different way. As you mentioned, I don't believe in the buy and hold strategy. I don't believe in diversification, which I do diversify, I believe in diversification, but everyone sees diversification a lot differently than I do. And so we'll touch on that. But I want people to realize that there's different assets, and we need to diversify between the different asset classes. So for just a high level example, a lot of people will go and buy hundreds of stocks. And they say, Well, I'm well diversified. Well, the reality is, when we go into a bear market, or recession of financial reset, almost all stocks go down. And so it doesn't matter if you own 100 A different ones, you know, a rising tide lifts all boats, well, a falling market takes most stocks down with it. So owning a whole bunch of them, you're just having a lot of positions that are going down. So I see the stock market as one asset, it is one investment doesn't matter. If you own an index fund, or you own 300, individual small cap companies completely off and doing their own thing. They're all still one play the ocean, or the stock market is either going up, down or sideways, there's times to be long times to be out times to profit from falling prices. And I believe if if it's not favorable, you should move to a different asset class, maybe you move to bonds, maybe you move to a currency, maybe you sit in cash, or you go outside of the realm of the stock market, you say, hey, you know what I want to get into real estate or I want to get into startups. And every one of these assets has their own lifecycle their own characteristics, and they all move a lot of the move at different times. But still, the economy really does almost act as the ultimate ocean, that sometimes you know, almost no position like a cash position, which we might be coming into over the next couple of years, could be a very safe place. So you do have capital to reinvest when things are fair value, or potentially even undervalued, including stocks and real estate and things like that. So I want people to realize that they can take their capital and reinvest it into a different asset. using technical analysis, we can identify when something is going up or down. And if it's going up, we want to own it. If it's not, we'll go find something else that's in from a high level of kind of what I focus on.
Andrew Stotz 04:20
And if we look at, let's just talk about buying hold. So buy and hold is one method of investing. And it's generally an equity only method. And let's just say, if you did buy and hold investing over the last 50 years, you would have gotten maybe a 10% average annual return. Maybe you could say even 12% Because the last 10 or 15 years were like super strong, but let's just say 10%. Now, you could also say that, well there's another form of investing, which is some sort of asset class diversification. We use a simple as form, let's say stocks and bonds. And then we say okay, well that instead of 10 percent. Now we're down to maybe 6%. Because we blend it in some other asset class that doesn't perform as well, in the upside, which is bonds. So therefore we're at, let's say, 6%. Now, if we had been employing asset reinvesting in our employing your style, would we be expecting that we would be getting a higher return than that or lower return? Or would it be the same return but a lower risk? How would you look at it relative to let's say, the traditional numbers?
Chris Vermeulen 05:29
Yeah, sure. So a good example will just be the last 10 years, if we go back the last 10 years, you do the buy and hold with the 6040 portfolio, it's only average something like five point something percent, it has been a very difficult time for stocks and bonds, bonds, catching a lot of people off guard in the past couple of years. If we did like an asset investing strategy, one that I deploy, which we only buy ETFs, we just move into one asset class at a time, whether it's the indexes, it's the bonds, it's a currency or a cash type of position. we've averaged about 16% a year. And the big kicker is, you know, the stock market has got about a 50 plus percent drawdown during bear markets. The stock and bond portfolio is about 38 39% max drawdown, our strategy is less than 6% drawdown so you get dramatically more upside potential with a lot less of the volatility because as soon as these the market or the asset we're in starts to show signs of weakness, which we use a lot of things to help identify that, we just step aside. And believe it or not, we sit in cash 30 to 40% of the time each year, which sounds crazy people are like, well, I need people think they need to have their money invested. I don't believe that's true. I'm like, if something's going sideways or down, you're best just to keep your capital and collect interest. When we move to cash, we can move to an ETF called Bill bi, L is the symbol and just collect monthly dividend, we just collect cash, well, we're safely on the sidelines. And that's what I like to do. So there's, it's a dramatic difference. And one of the biggest things, there's people near retirement or who are retired, if we do go into a big recession, this one, to me this setup that we have going on in the financial market space without getting into, you know, talking about big forecasts and stuff, this could be something similar to a 2000 kind of tech bubble in terms of it might be a multi years of lower prices, it could take a decade to recover, this could be a lot worse than people think. And whether it is or not, it doesn't really matter, at least the one thing you want to do is make sure you're not going to be withdrawing funds in retirement. And you know, people run into this problem, they don't realize sequence of returns risk where if you have to withdraw money every year to subsidize your retirement, and you go for five years where your money is lower in value, it's drawn down in value, hey, you're pulling money out, when the market does recover. Your account gets whittled down very quickly. And most people don't realize this. And this is the number one reason why most investors start to run out of money early in retirement. And it's because of these and the whole thing that I try and focus on is we don't ride the markets down, we'll step aside or will profit from those falling prices by moving to inverse ETFs, or different assets. And that's, that's the biggest thing over the next little while here is it's going to be about preserving capital.
Andrew Stotz 08:22
And maybe we'll just take a step back and answer the question like What is an asset class, because I know, I've seen people that will look at 15 different ways of slicing the equity market and call each one of those an asset class, which I would call that an equity asset class. And there's some people that could even call corporate bonds as still an equity asset class because they're exposed to the companies that are underlying but let's just say that, okay, bonds are a separate asset class. How many? I mean, is there 100 asset classes? Or are there only really four or five or whatever?
Chris Vermeulen 08:59
Yeah, I keep it pretty broad, pretty big. So I think the stock market index, or stocks of any sort, are, are an asset class of their own. That's, you're in a stock position, I say bonds, any type of bond position is a bond play a currency, you can buy ETFs for the currencies, or you can move your money into an actual currency is another one, I think commodities are considered an asset class on the road. And, you know, you know, the real estate is one, there's, you know, those are kind of the core, the core ones and those that's what I look at. So when I'm using this asset, investing strategy, I use a hierarchy of assets. So we actually have a list of the assets, and they go from the most volatile at the top being our most preferred, we want to be in the thing that moves the fastest if it is in favor and going higher. So we want to be in the stock indexes, but if they're not favorable, we'll look down to Treasury bonds. If they're not favorable, we'll move down to the US dollar current Let's see like the US index ETF. And if that's not favorable or doesn't meet our trending criteria, then we can actually move to the inverse dollar. And then if that's not meeting our criteria, we just moved to a bill a cash position where we just collect monthly interest with our gunpowder dry our money safe. And we wait for a new setup. And what's nice too about those is as we go down those assets, typically the markets are getting more volatile, they're getting crazier and crazier. And each one of those is moving is a slower moving assets. So we're actually stepping away from volatility, we want to go in something slower trending, and in protect our capital, which is different than what a lot of, you know, traders and investors do. They almost there almost like a bug. To those zapper lights when volatility picks up, we have huge, huge swings, people, for some reason have to jump into Options trading, they have to jump into the 2x and 3x, leveraged ETFs. I mean, they're jumping in and doing the wrong thing at the wrong time at you know, using leverage, and we do the exact opposite of their herd mentality. We're like, no, no, we're moving away from volatility. And the thing is, if we don't take big losses, we don't need to go hunting and swing for the fences to have big gains to make money back, we're looking for first second base hits over and over again, sometimes we get into a beautiful trend that can last 678 months. And we do really, really well, because we're following a trend. But people for some reason think that they always have to be invested in the markets, when things are volatile, they need to get more active. I mean, it's just it makes me cringe to see and hear what people do, you know, in the markets just from lack of understanding of risk management.
Andrew Stotz 11:44
And one last thing before we get into the big question of the podcast, and that is one of the hardest things about getting out of an asset. When you think it's going down, is that you realize, oh shoot, it's actually not going down. It just went down for a day, a week, a month. But that now it's bouncing back from that. And all of a sudden, I executed a stop loss, or I got out. But I got out too early. And now it's bouncing back. And I'm just curious, tell us a little bit about what you explain about how to determine if something is truly going down. It seems pretty obvious, hey, it's going down. But really, that's not as easy as it seems.
Chris Vermeulen 12:30
Yeah. So to try and keep it I'll try and keep this fairly short. But you know, when I was 16 years old, I got my pilot's license. And I remember the day I arrived, my mom dropped me off at the airport. And the instructor says, Hey, Chris, you're doing your solo today, grab your stuff, head to the plane, I'll be in the control tower, here are the things you need to do. And I remember taking off from the runway, my heart pounding, I was like laughing, I was crying. I was singing a song. I mean, it was a dream come true. I love defying gravity. I always built in flew model airplanes when I was a kid as well. But I got up there and I was so emotional. I didn't know what to do. And I remember just finally snapping out of it and being like, okay, let's, let's fall back to the basics. Put my hand on my leg, I had a little checklist if you're a pilot, you know, there's a checklist for absolutely everything. And all I did is I went through that checklist, one thing at a time, you know, turning into the circuit, the radio calls, flaps down, you know, turning final all that stuff. And I remember landing on the ground and rolling out the instructors like Nelson he says, Chris, he's like, congratulations, you're a pilot. And that hit me at the age of 16. When it was all said and done, I realized that I had practiced the strategy, a system, I trusted it, and I followed it, I followed through on it. And that is how I kind of built everything going forward from businesses that I started and sold off and to my trading strategies. They're all systemized, I don't, I don't trade by the seat of my pants and go, Oh, this looks and feels good. And I like this today. And I love that I'm going to hold on to it, even though it's going down, you will catch me doing that I am rule based. It's all about following rules that are proven and following trends. And a good way of doing that is using technical analysis. And I learned back in the day when the 2000 tech bubble burst, you can buy companies that are growing actually quarter after quarter, some not related to the tech space back then. But the stock price was still literally get cut in half. And I realized fundamentals didn't work and I learned that technical analysis that if I follow price, then I can just identify when it is trending higher and I can get into a position to benefit from it. And if it's going down, I could benefit from that as well or find something different. And so I use technical analysis. You know, John Murphy's like The Godfather of technical analysis, he talks about all the different inter market analysis everything is related. If one asset class is going down, that money is coming out of that asset, that group of assets and moving into a different asset class. So if you understand all the different parts of the markets, if something's going down, it's going somewhere. So we take all this inter market analysis and find out is money moving to risk on assets, risk off assets, how, you know, I look at a lot of volume flows on the New York Stock Exchange to see if people are panic selling, if they're dumping on the bid or just buying at whatever price they can on the ask, I look at the put call ratio, look at what gold's doing utilities, all kinds of different things. And we can get a really good feel of not only if price is trending higher, but how much power and momentum is behind that, is there big money flowing into all kinds of things that support that, you know, stock market trend going up? Or is this just like a bounce in an emotional driven move by the masses, that's going to fizzle out, roll over and die. So that's kind of how I look at the markets I look at from a price perspective, I want to see if it's trending, I like to see sentiment using volume flows, the VIX put call ratio, also sentiment, I kind of look at how money is flowing to the different sectors, because that's telling us are they nervous, defensive or aggressive? And, you know, so I use a lot of different types of analysis, I don't just look at a bunch of indicators, which I think is a big fault that a lot of people do. Chart indicators are all based off price, pretty much. So really, you're just looking at price reanalyzed in a bunch of different ways. And that's why a lot of people get analysis paralysis. They're like, Oh, I got five indicators, saying it's a buy. But these three are saying it's a sell. And so every piece of data I use is a different type. It's time based, it's emotional, it's volume, it's, you know, price based. So all these things have to come together. And it tells us how strong or weak a signal is, which stock index, we should move into where we should take partial profits. There is a lot that goes into it, to identify these and be able to manage those positions.
Andrew Stotz 16:58
And where should people go if they want to get your book?
Chris Vermeulen 17:02
I mean, Amazon is obviously the easy one. But it's available everywhere.
Andrew Stotz 17:07
Yep. And you just came out with it in May of this year. And I see you've got 252 ratings, which is already great. And a 4.6 out of five on Amazon, which is very good. So looking forward. I haven't read it yet. But I just ordered it on Amazon while you were talking. So I'm looking forward to going through it. So for the audience, I'll have links to that in the show notes. Well, now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to it. And then tell us your story.
Chris Vermeulen 17:41
Sure, so I've had a few I think we've all had some pretty, pretty bad investments. But the one that really stood out to me. So I was fortunate enough that my parents paid for college when I went off to school, they paid for, for everything. I ended up making enough money in the last year of college trading to pay for my last year, which was when I really got started in the markets. But I got out of college, my parents, you know, were lucky enough to come out with no debt. And they said, you know, here's a Honda Civic, you have wheels, no debt, you're free. You're educated, like, go make waves, right. And, you know, free is a bird. And my dad happened to be helping a friend with a business. He was selling generators. And this guy was importing them into the country. And I of course, I'm always looking, I'm an entrepreneur at heart, I'm always looking for all kinds of interesting things, opportunities, and I look at I'm like, Dad, I'm like, You can buy these same generators from China, you know, overseas, back then it was just Alibaba. And it was a pretty bare sight back then. But you can buy these and sell them for 10 times the price here. I see why this guy is selling, you know, hundreds of these things a month, and he's living up life and he's got you know, you help you right. And so we decided we're like, let's just hop on a plane, let's fly to China. Let's go to the Canton World Fair, where there's literally 40,000 You know, products and manufacturers of everything you can imagine. And so we hopped on the plane, we flew to China. And every day we walked these warehouses that were literally long enough you could see the world curve, like the curvature, it was insane. And we had these little suitcases with wheels. And every time we saw a product that we like, we had no idea what we wanted to do. We did not want to do generators because it was a nightmare. Product quality was a problem. But anyways, every time we found a product, we would take the pamphlet, slide it in our little suitcase bag and just keep walking in at the end of the night because it's 12 hours timezone difference from us. Of course we're wired for us it's morning and you know, but it's nighttime there so him and I would sit on the beds and like lift up the pamphlet, be like yes no maybe pile through like 1000s of brochures and then we played cribbage till pretty much the sun came up. And then we'd rinse and repeat for four days. And we ended up coming across a product far infrared saunas, which At that time, there was really no one selling them in Canada, North America in general just was way behind the times, it was something that had been used, you know, in Europe in overseas for a long time, but not over here. So we had these custom design, far infrared saunas, two person, three person, four person. And we put in this big order we spent about our, you know, I borrowed $250,000, ready to like, take over the world. And the products arrived, you know, months later to 40 foot container loads, we had a warehouse and we had rented fork truck everything, we unload the product, we set one up. And we realized that they had more or less kind of scammed us, excuse me, and the products weren't certified for Canadian electric electrical code. And of course, if you have anything new like that, anyways, Canadian Electrical Safety Authority came because they saw we're selling saunas, they check them out. And they're like, these are not approved, you cannot sell these. And we're like, Well, what are we supposed to do, he's like, leave, they have to go to the dump, you're not allowed to use them, you can't sell them for anything, all that stuff. So I went from being as free as a bird. And within the first year, borrow 250 grand, bought two container loads that we had to take to the dump, pay to get rid of them. And it took us over a year and a half to get the next batch of products that were actually certified. And it was the most nerve wracking, frustrating, depressing thing ever, because I went from one extreme to the other. And I mean, it was a terrible experience. But in the end, it worked out very well. We ended up bouncing back stronger than ever knowing exactly what not to do. And how we were going to do. We had like a year and a half to prepare our marketing. And eventually we got our products. And we built a dealer network across Canada, the United States got the product as, as seen on TV. And we built a booming business. But it was the most nerve wracking thing of doing the whole process and going backwards to be like in more debt than I could have ever imagined at the age just coming out of school from free to go bankrupt. More or less, if we gave up I would have had to go bankrupt. But we had to struggle it out. And it ended up working out very well. We found more products. And we ended up selling the company in early 2008. I was deep into the stock market during that time as well. And I saw the lights about the music coming to an end in the stock market the economy. I said, Dad, I'm kind of tired of the sound of business. I love the markets, I really want to just focus on you know, investing, let's sell the company. And so we did and we literally sold the company at the top. And then the world fell apart financial crisis hit. And it ended up working out perfectly in the end. But it was the worst, most nerve wracking experience of my life.
Andrew Stotz 22:51
So how would you summarize your lessons that you've learned?
Chris Vermeulen 22:55
Yeah, I guess, you know, if I just summarize it, I'm not a fan of physical products, I don't think I want to sell physical products. You know, I have that type of business. Again, I'm definitely a digital world. I'm more of an introvert as well. So, you know, installing saunas and doing phone calls and customer support, because him and I did everything and my wife helped me as well. Yeah, I just You got to find what you're passionate about. Right. So I'm not a fan of a physical product business, I love information. It's fast, it's, you know, transferable very quickly, I would definitely step into something very small, small steps by like, you know, a small container load one. And versus, you know, dumping all of our money and saying, you know, these are going to hit, we're going to, you know, sell all these and then reload with more. So I would just probably go a little slower. And I'm very conservative now. Like, for example, I got my pilot's license, I learned all about systems and strategies, and I instantly implemented it to my trading. But a few years after that, my parents actually went bankrupt. And my dad was retired already at that time. And he got back into the entrepreneur space, but with the wrong people who literally took the investment capital and just vanished. And so he went from being retired in his 40s to bankrupt and losing, you know, family and investors that he had been working with his whole life. He made them all wealthy, and ended up losing a huge chunk of capital. And it actually ended up leading to him having seizures and I remember the whole episode that happened. My sister, my mom, and I thought my dad was dying. And we realized he was having seizures because of lack of sleep, financial stress, and he went from being you know, financially set super healthy to almost dying, lost everything all because he didn't protect his capital. And so by going through that process, and then experiencing this whole business where we lost everything in one blast, I have become a very conservative trader investor. I probably could have a lot bigger returns if I was a lot more aggressive. But I have I'm not that type of person, I'm very controlled, I will take a bit slower conservative gains. In the long run, you ended up actually with a lot more, which is what asset investing is about. It's not swinging for the fences, even though we do very well. It feels like watching paint dry, because we only have five or 12 trades a year, we're in one ETF at a time because we're only moving into one asset within our hierarchy at a time. And it's just a different type of strategy. So it's Yeah, I don't know if that answers your question or not. But
Andrew Stotz 25:32
that's, it certainly has shaped you, and how's your dad these days?
Chris Vermeulen 25:38
Everything's fine. That was a short lived thing, he lost his license for a year, got it all back. And, you know, everything is good, but it was a scary time going from, you know, the top to the bottom very quickly and losing everything. So,
Andrew Stotz 25:53
you know, I, my, my biggest takeaways start small, you know, test things out, you know, if you had just bought over one or two, you know, let's just say one of those saunas, which they probably would send you minimum orders XYZ, you know, there's all kinds of ways that it's difficult to start small. But ultimately, start as small as you can, because you're gonna find those mistakes as you iterate through it, you know? So that's kind of my biggest takeaway. I'm curious. Was there a minimum order? And that's why you ended up with those two containers. Were you guys like, no, let's do this big time.
Chris Vermeulen 26:34
Yeah, we're, we're pretty, I mean, back then I was aggressive. I was like, Let's go all in, you could buy a you know, a 20 foot container or a 40 foot container, or 40 foot HQ, which is a high quality, high quantity. And I'm just like, well, let's just buy two containers. I mean, we had already started to build things that we had everything pre sold, this was the kicker, we pre sold everything before we even ordered the containers. So we borrowed the money to reduce your risk, we use some, yeah, we reduced our risk. But then it all came in, and we had to pay to get rid of it. And then we had to give everybody their money back. And it was just like, oh, man, it was pretty painful. But just as you were saying, I start very small. So I, I dabble. And I do a lot of different stuff. I'm into self storage facilities, rental properties, into some aircraft companies, and different things like that. But you know, I'm working on a couple projects right now, where we just find a close group of people who are passionate about the same thing. And we're inventing products we all have, you know, we all play our part, we all can do something different. And we're just kind of tinkering and bringing products and ideas, kind of into production, or into prototypes and testing. And it costs us nothing but time. And it's just exciting doing it. So I like to just tinker and a lot of little things. I've done a ton of different things. Some of them have been highly successful. Others, were just a great learning curve. But I don't, I don't really go all in on anything anymore. It's like, let's just have fun. If everything just falls into place, we'll keep running with it. If it's a grind, we're out. Or we don't want to do something if it's not fun. So
Andrew Stotz 28:03
let's think about some young men and women that are listening to this. And you know, they're in a somewhat similar, exciting phase, based on what you learn from this story and what you've continued to learn what's one action that you'd recommend that our listeners take to avoid suffering the same fate?
Chris Vermeulen 28:22
Yeah, I think we kind of covered it, I would say, first of all, do something you're passionate about, because the reality is, specially if you're going to be an entrepreneur, you're going to start a business, I mean, your brain never stops, you're gonna have to do it every day, whether you like it or not. So it's got to be something you're passionate about. Because eventually you're gonna run into tough times, you're gonna hit a recession, you're gonna have a bad load of products that you can't sell. If you don't have a passion and the drive behind it, you're more likely to give up and have a very bad experience versus then versus then like knuckling down and being like, we are going to get through this and come back with a vengeance. So you know, do something you're passionate about, we only live once life is really short. You know, it's super easy to waste a lot of time. And you can't make we can't get time back, you can always make money back. So I'd be like, you know, everything I do now is stuff that I'm very passionate about stuff that I do. So that'd be the big takeaway is you might not make as much doing something you're passionate about. But if you're really passionate about it, you're going to find a unique twist, if you're creative person, to find a way to make it work or for you to fit into the world doing what you do. And eventually, if you're really passionate about it, you will become one of the best and you will eventually become highly successful. You only have to be really good at one thing and you can be absolutely, you know, wealthy as you could ever imagine. If you could just help enough people with whatever product or thing that you're good at doing. So it's not about doing a lot of different stuff from that regard.
Andrew Stotz 29:54
Okay, and what's the resource either of yours or any other resource that you'd recommend for our listeners?
Chris Vermeulen 30:01
Yeah, so we didn't really touch on it. But I think understanding how the market moves, cycles stage analysis, I do cover it in my book, I explain it, it's pretty good detail. But I learned the stage analysis from Stan Weinstein. And if you haven't read his book, How to profit from bull and bear markets, it's a great book, he teaches the four stage analysis, more or less, there's four stages that the stock market goes through, he teaches you how to identify it. And each stage requires a bit different strategy. If you understand the stages, you can apply that to whatever you're investing in, whether it's real estate, whether it's the stocks, or a commodity, like precious metals or something like that, once you understand where things are in their stages, it's almost like the skies clear, you can see things very clearly, you can see things coming a mile away these these big stages, these big trends, and you can slowly kind of be prepared and then get positioned for them. And unfortunately, most people with their investments are running blind, they don't see anything coming, they don't know what's going on. And that's why most people get stuck in such terrible positions like the buy and hold strategy. Like if we go into a bear market that could last three, five, who knows years, you're wasting three or five years of no growth, three, five years of high stress. In 2008. There's like 6500 people that committed suicide directly related to falling equity prices. And I experienced that seeing financial loss on my dad's side and how it almost took his life. And that's the whole point of why I try to do asset investing, I'm trying to share it's a new term, because I don't believe active trading is the solution. It's very risky. It's like 97% of active traders over a 300 day window will lose money, even during a bull market, the buy and hold, you end up wasting decades of your life invested of not making any returns, we can always make money back. But if you waste 10 years, you can't get those back. And my strategy allows us to just it doesn't matter what the markets do. We identify a trend and asset. We're playing it. And we don't waste time making money. You don't see a lot of people retiring 20 years younger, both a buy and hold. And so that's what I'm trying to get around is how do we retire sooner and generate great returns with our capital without risking it doing the things we love doing at a much younger age.
Andrew Stotz 32:25
So last question, what's your number one goal for the next 12 months?
Chris Vermeulen 32:30
I think based on kind of the whole economy and everything that's going on, I think it's all about capital preservation. As the markets potentially break down into a stage for decline, a big financial reset, kind of like 2008, the 2000 tech bubble, if that happens, there's going to be some amazing opportunity to profit from falling prices. And I think one of the big things is going to be not to act too quickly when the markets fall or there's a reset in real estate or anything like that. I think there's a lot of downside. We haven't seen anything fair valued for a long time real estate is ridiculously overvalued in my opinion. Stocks are still overvalued. So protect capital. Don't jump too soon. The real estate market I find moves very slow. I cannot wait to get into more real estate get into more multifamily properties. You know, passive cash flow is unbelievable. I love real estate. But if you don't do real estate properly, I mean, you'll end up buying high like in the last year or two. And then you know having this huge mortgage, high mortgage rates and you know, be cashflow negative. So yeah, it's preserved capital and start learning about the stages for the assets you're passionate about. And when those stages are in the right location, right timing, then you start moving in and look for the assets with a strategy find a plan, find somebody who does what you do, or you want to do and follow ride their coattails.
Andrew Stotz 33:57
Alright listeners, there you have it another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. As we conclude, Chris, I want to thank you again for joining our mission and on behalf of East Arts Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?
Chris Vermeulen 34:22
I think we covered I think just everyone needs to realize, you know, protect your capital. Don't get caught up thinking stocks are the only asset you buy a bunch of them. There's a lot more things out there to invest in.
Andrew Stotz 34:35
And that's a wrap on another great story to help us create, grow and protect our wealth fellow risk takers let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast shows Andrew Stotz saying I'll see you on the upside.
Connect with Chris Vermeulen
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
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