In and Out | Broker Execution

InvestIt Now Signals Newsletter - Volume 1 Number 3

Introduction

In our first two articles, we introduced the In and Out long-term investment strategy, the InvestIt Now Telegram channel and the risk benefits of using this strategy as it pertains to minimizing the drawdown of this investment strategy.

Now, let’s talk about executing our strategy with real money. For the real money, we’ll create and use a Robinhood account.

Robinhood- Your real money account

Brokers manage your funds when investing in assets involving public markets that may include fiat (government) money (cash).

Banks manage cash…storing, accepting, loaning, etc.

Robinhood is a broker that is generally known as easy to use. You sign up, complete the Know Your Customer (KYC) paperwork, and deposit funds into your account. With all or a portion of the funds in your account, you can execute the In and Out strategy using our signals to trigger (by hand) the Buy and Sell trades needed to execute what the signal is telling you.

For example, suppose your account is IN, with $1000 invested in SPY, and you get the OUT signal from the “In and Out” strategy. Then you will perform the operations inside your Robinhood account:

1. Sell $1000 SPY.
   Now you have $1000 more Cash in your account.

2. Buy $1000 SHV.
   Now you have $1000 less Cash in your account and $1000 in the very short term treasury bond asset SHV.

Here is the link to the personal information you will need to get started with signing up for Robinhood.

Here is the link to sign up for the Robinhood app. Preferably, signup using your mobile device. You’ll have to download the app on the Apple Store or Google Play.

In the spirit of more learning, more choice, here is a link to NerdWallet: Brokers for Beginners. Any of the brokers mentioned in that article will do the job for you.

Brokers

With the long-term investment strategies delivered by us, we will need very few features of what modern brokers offer.

For this portion of your overall portfolio (collection of assets), we recommend no borrowing (leverage/margin/shorting), no crypto, no futures, no options, no rewards…no nothing except long-only buying and selling extremely liquid assets.

It’s your money, and of course, you can do with it what you want, just beware of too-good-to-be-true returns promises and debt or staking schemes based on trust.

If you have a mortgage, you are already in a debt/leverage situation with enough risk. Just owning SPY adds to your risk profile, as most of the companies in that index have debt that they must manage. To get the returns we desire that is above owning simple short term treasury bonds, we must take some risk. Lending and borrowing via your broker adds a whole new level of risk to your portfolio. Don’t do it unless you understand and accept the risk that you are taking of losing major portions of your portfolio.

Robinhood Onboarding

Here is the best Robinhood onboarding video we have found. It is from 2021, yet all of the info seems accurate, and matches up with our own onboarding process we completed a few days ago (July 2023).

Once you are onboarded and have deposited a small test sum of money into your account, you can see the current state of the In and Out signal at the Telegram link

When starting out, just convert the state HOLD to BUY, as you’ll be going from being all Cash to the hold target asset.

Conclusions

It is easy, though scary to start a broker account to start executing a strategy. The easy part is the app click-click-click that gets you to a fully functional account. The scary part is giving all your personal information, linking up your bank account, and then transferring over funds. Do it with small amounts first as a test. You’ll feel better about that, and so will we!

In the future, look here for more details about In and Out, more strategies, and ways to test our or your strategies using paper/test broker accounts.

Remember, investing involves risk, and past performance is not indicative of future results. Please consult with a financial advisor before making any investment decisions. None of the information we present to you is personal investment advice.

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