Apologies for mangling the well-known Chinese curse — may you live in interesting times — for today’s title. But it does seem rather appropriate for the seemingly never-ending stream of catastrophes we investors have had to deal with over the last few years.

From the turmoil of Brexit, through to the stomach-lurching volatility at the height of the pandemic, through to the indiscriminate death and fear caused by Putin’s invasion of Ukraine, it feels like we just can’t seem to get a break. Of course, the war is a horrific development at a human level and that is our primary concern, but it does also feel like the latest body blow for investors to have to deal with.

Do you find yourself wishing for less interesting times? I don’t think you are alone.

Pity the poor ‘buy and hope’ stock investor. As their portfolios take another battering they have very little control over how to deal with it. Essentially, it’s a choice between riding it out, selling up and taking a loss, or arguably the best approach, buying extra shares whilst they are trading at more attractive levels.

The Tool Kit 

Now, I’m not suggesting that FIRE Revolution investors are immune to the gyrations of the stock market because we clearly are not. But, we do have a number of factors and techniques on our side that make it a lot easier to sleep at night.

Firstly, we only invest in high-quality blue-chip stocks. The type of stocks that have been around for years and are likely to be around for many more years to come. Keeping that in mind allows an investor to look past the short-term bumps in the road we will inevitably hit.

And we generally ensure that they pay a well-covered dividend to add to the income streams we generate by selling cash-secured puts and covered calls. Unlike regular investors, we can tap into those additional income streams even if the stocks themselves take a tumble. That provides a great hedge for the shares themselves.

But beyond the core strategy, we also have a number of additional tools that we can use if a particular stock heads south. And learning how to deploy them is a key — if advanced — component of the FIRE Revolution programme.

Indeed, I like to emphasise to prospective clients that the real strength of the strategy comes not when things are going great, but when the going gets tough. In other words, when you are investing through ‘interesting’ times.

Let’s have a look at a recent example.

International Consolidated Airlines (IAG)

If ever there was a sector that you really wished you hadn’t invested in recently then it would have to be airlines. Many investors have had their fingers burned in this sector and one of them could well have been Barry — one of the more experienced investors in our community.

But instead, having sold puts on IAG — the owner of British Airways — just as the share price dropped, he has managed to deploy several of the option-related techniques we teach to dig himself out of the hole and gradually fight his way back towards a profitable campaign.

He originally sold cash-secured puts with a strike price of 180p back in the spring of last year. That initial transaction brought in a healthy premium but the price of IAG stock continued to oscillate downwards.

Now, a buy and hold investor would simply have to strap themselves to the rollercoaster and hang on. Or bail out for a loss. But Barry smartly sold some extra puts and then rolled his existing puts out to September for additional credit. And then he did it again in November. As we say at FIRE Revolution, he kicked the can down the road a few times — and got paid each time for doing so.

Barry is also the master of another technique we sometimes deploy. When we sell an option our default position is to sit back and wait for the expiration day. However, with a volatile stock like IAG there are often opportunities to exit early and ‘grab a quick profit’. You get paid a little less overall but your obligation can be lifted way sooner.

However, in this case, after racking up substantial premiums from rolling the puts he decided in December to be assigned the shares. And then he quietly sat on the sidelines awaiting a recovery in the share price. All was looking well until Putin decided to launch his invasion of Ukraine and the shares dropped again.

What to do? Well, Barry waited for the inevitable bounce and quickly sold two tranches of covered calls with strike prices at 160p — that’s 20p less than the price he originally paid for the shares. But all that previous option selling has reduced his breakeven price to 157p. So, if his calls are exercised, he will exit the whole campaign for a small profit. And if the stock retreats again, he will be able to keep selling calls and deploying other techniques until he gets back to profit. Smart guy.

Even when investing in a battered airline stock in ‘interesting times’ like these, a FIRE Revolution investor can turn a losing stock position into a winning campaign. That’s a very useful trick.

The key point is that any strategy can shine when things are going well but it’s the real winners that can shine even when everything is going wrong.

Social Proof

Now don’t worry if you didn’t follow the detail of Barry’s campaign. After all, he has been investing this way for a couple of years now. But I would like to reassure you that it is perfectly possible for regular investors to learn these techniques in addition to the core strategy that we teach. Regular folks like Ken H. for example, who recently had this to say about the programme:

 

Greg Robinson and the 5 stage FIRE Revolution he teaches, are for me the best thing since sliced bread so to speak. The training is extraordinary and detailed, the support is quick and helpful and Greg is seemingly always ready to help at the drop of a hat. The Zoom training calls, as well as the member’s forum, also opened up other views and ways in addition to the training supplied. Coming from South Africa has had challenges as the course is predominantly for UK-based investors, but Greg’s suggestions and way to go have helped tremendously to get set up. Best coaching & mentorship I have ever done and the only negative is that I wish I found this years ago. Instead of supplementing my retirement like now, I could have possibly retired many years ago and lived off the 5-stage revolution Greg teaches and applies himself.

 

Webinar

If you would like to learn more about the core strategy and the training programme we offer then I’d like to invite you along to our next LIVE webinar. I’ll take you through the approach in detail — including the risks — and then demonstrate exactly how we place our positions using examples LIVE in the market.

At the end, I’ll be happy to answer all of your questions and, of course, we’ll also offer an exclusive webinar discount on the programme. Don’t worry there’s no hard sell, just plenty of useful actionable education and real-life examples. At the very least, it will make you question the traditional approach to stock market investing.

I hope to see you there.