Option Fanatic, RIA (Part 2)

I left off presenting the logical question why I don’t attempt to make money for others if I have been successful making money for myself.

Many points for debate come courtesy of the Internet through my research. In no particular order, I am going to include some posts to guide my deliberation. After discussion of these posts, hopefully I will be a bit closer to making a decision.

       “You have been trading successfully recently and you have talked to some of your pals
       about your success and they want the same success and don’t know the risk or at least
       they cannot understand the pain of losing money so they have decided to ask you to
       take their money which is sitting in 1% CD and generate 20% a year. I am one million
       percent sure that if you lose just 1% of their money they will be mad at you like hell.
       They won’t tell you this now because they are so sure that you won’t lose money so
       they don’t want to talk about impossibles.”

I would want to make absolutely clear to my clients what kind of risk my trading involves. I have done some rather unique backtesting that will offer a comprehensive answer to this question. This is never a game of certainties but rather one of probability. For that reason, I will insist committing a limited percentage of total net worth to my trading strategy. Yes it will be likely to generate consistent income–much like a fixed or variable annuity (without the ridiculous fee structure)–but in the event something improbable does happen, catastrophe should never be waiting in the wings.

       “Politely decline and thereby retain them as pals.”

I wonder if many of these comments aren’t directed at those people aiming to sell snake oil. If the product is fraudulent then one can expect loss of friendships.

I don’t want to sell my trading strategy as much as I hope to educate people about it and have the strategy sell itself.

I will continue with more discussion in the next post.