Tyrone Jackson has been teaching for almost 10 years and trading for over 20 years, and he always starts by teaching his students on and offline to write covered calls. This is a great place to start because it produces guaranteed residual income. We want to own stocks that pay dividends and that allow us to sell call options. 

There are always going to be people who like high risk stocks. They think if they buy these risky stocks for very cheap right before the stock sky rockets they will make quick money. The problem is this pattern rarely happens. You are better off going with the more established names with consistent top line revenue. 

Here are a few examples of high risk stocks that traders have been tempted to invest in for the past few years:

Tesla

A lot of people got excited about Tesla automobiles and recognized their opportunity to have a significant impact on the auto buying market. Had you bought the stock five years ago with a $1,000 investment, today your shares would be worth $8,600. Its not that the company is so great, it’s just that investors got very excited about what Tesla was doing. However this is a high risk stock because the company does not have a long track record, it does not pay a dividend, and it doesn’t have a history of top line revenue. The revenue hasn’t been there long enough for us to follow it as a disciplined investor.

Go Pro

You’ve seen the Go Pro cameras; they are very cool products to own and they capture beautiful video. However, we in the Wealthy Investor program, never purchase stocks from companies that only have one product. Yes they have different version of the same product, but Go Pro could easily be dominated by a bigger player. A company like Apple could come out with their version of this camera tomorrow and knock Go Pro out of the game, because Apple has a very loyal fan base. If you’ve noticed over the past few years the Go Pro shares has gone from a high of $90 per share down to $25 per share. 

Pandora

The problem with Pandora stock is, if Apple decided to launch a music service that rivaled them, Apple would take the market share. Pandora has gone from a high of $37 per share down to $13 per share.

If you are just starting out, you want to start by investing in lower risk companies. If you grow your account over time on the strength of these low risk companies, in the future you may be able to afford a little more risk. For now, your next step is to visit TheWealthyInvestor.net and download the free ebook Trading Stocks for Wealth. This ebook will introduce you to low risk strategies. There is no reason for you to take on more risk than necessary. Click HERE now. 

Some people say, “I would never put my money in the stock market because it’s too risky.” Yes there is risk, but without risk there would be no reward. There are companies in the DOW jones that are less risky because they have proven their revenue - companies like Coca Cola, Disney, Apple etc. In the Wealthy Investor Program we try to balance risk by leaning a little more conservative and having most of our money in DOW stocks. 

Today Tyrone talks with someone well versed in risk. Josh Belanger is an option trading specialist and author of the book Fearless Investing With Options. Josh began working at 19 as a pizza delivery boy. He told one of his regular customers about his dreams of becoming a stock broker, and the customer advised him to get a Series 7. While Josh studied to pass the Series 7 exam he worked on the floor of the Chicago Stock Exchange as a runner - the lowest man on the totem pole. After the test, Josh had a career as a stock broker, or financial adviser. 

After paying his dues, Josh started to see how the internet and technology was changing the industry. He also realized that he wasn’t really learning to play the game of the stock market. He got out of the finance industry and started trading options aggressively. Now Josh is the founder of www.OptionSIZZLE.com where he publishes free daily investing and trading tips and teaches struggling self directed investors how to become more profitable trading options while reducing risk, creating higher chances of success and generating better returns in any type of financial market. 

Having been on the other side, Josh believes that mutual funds are legally stealing everyone's money. The monstrous fees taken by the financial advisors and firms compared to the little amount of money they make you in return is unreasonable. Also, financial advisors are required to operate under so many legal restrictions, that there's not much they are allowed to do to grow your money.

Now trading on his own and helping others to do so, Josh has focused mainly on options trading. In Tyrone’s Wealthy Investor approach, he teaches LEAPS options trading. In a LEAP, the option has a one year expiration date. Josh’s strategy utilizes shorter time frames; his options usually expire in 30 - 50 days. Josh looks more for income generating opportunities instead of focusing on long term investing or day trading. 

Josh believes that one of the first things you need to understand is implied volatility. Ideally if you buy an option you want the implied volatility levels to be low. If you buy an option, you want to look to sell it. Your fear about what could happen is greater than what really happens in the market. Typically Josh buys an option and sells another option. He does this to reduce the overall cost and increase the probability of success. This would be considered a spread.

As Tyrone always says, "The Stock Market is a game with a hundred ways to play it." To learn how to build your strategy and get in the game visit WITradeSchool.com.