I get the same question every time we double our reader’s money:
“How do I handle the really big gains?
I mean, what should I do now that my stock has zoomed past 100%? Cash out? Hold? Load up on more? What’s the best move to make now?”
Clearly this is a great “problem” to have. And, I admit, every time I get this question, it gratifies me to know I’m doing my job: Helping my readers make a bundle investing in tech.
Yet, it’s completely understandable why many investors, not use to making so much money, and experiencing the thrill of victory, suddenly freeze when facing the daunting prospect of ‘what to do next.’
The last thing you want to see is your gains skyrocket past 100%, and then watch your profits dwindle as the stock recedes.
That’s why today, I’m going to show you one simple strategy that can ensure this never happens to you.
It’s a strategy I follow to a T every time I double my money.
And it’s incredibly easy.
In fact, this single strategy accomplishes something absolutely critical for your future investing success: It removes risk… while still giving you the chance for infinite upside.
Let me show you how this incredibly powerful – yet amazingly simple – strategy works…and how you can start using it for massive gains right away.
The “Problem” Every Investor Ought To Have
If you’ve been following along on our journey to create meaningful wealth from tech, I’ve repeatedly told you that doubling our money in this sector isn’t that tough to do – if you know what to look for.
It’s clearly stated in Rule No. 5 of my Tech Wealth System: You need to find companies that are growing earnings at high rates – 15%, 20%, 30% or more a year…and companies that can do this repeatedly.
All five of my rules tell you how to find such companies step-by-step.
The real dilemma for many investors, however, is what to do after a stock doubles – and you have a chance for some really life-changing gains.
Now, most people will tell you when your stock doubles you have three main options:
- You can cash out, bank the profit and look for the next opportunity. This method eliminates any downside risk on the position. And hey, who can criticize someone who was smart enough to double their money?
- You can let your position ride, but protect your downside with the use of “insurance” like trailing stops. I’m a big advocate of trailing stops but if the stock hits your stop, you won’t enjoy any subsequent gains, if the stock later resumes its run.
- Or you can let your entire investment ride without any “insurance” whatsoever. From overall standpoint, this could net you the biggest profits, but it’s also the riskiest move of them all.
Any of these options could potentially make sense, depending on your overall investment goals – and your tolerance for risk.
But I believe my strategy for handling big gains is far superior…
It’s called a “Free Trade.”
It works like this. Once a stock in your portfolio has doubled in value, you automatically sell half. At that point, you have recouped all of your original capital.
At that point, you really are working with free money. You’ve covered your initial investment and are now literally playing with the “house’s money.”
Having converted your investment into a Free Trade, you’ve really achieved the best of both worlds.
You’ve not only paid for your trade, limiting your risk, you’re also getting the chance to capture a nearly infinite upside.
Of course, as I’ve said, most people aren’t use to making this much money and doing this on a regular basis. And there are several ways to handle such gains.
So, let me show you some recent examples of how I used the Free Trade strategy with my readers of Radical Technology Profits, my aggressive trading service.
With Santarus Inc.(NasdaqGS:SNTS), a specialty biopharmaceutical company, for example, the stock doubled quickly.
In fact, my readers picked up an initial 104% gain in less than five months.
When we doubled, I immediately alerted my readers to take a “Free Trade” and put in a 20% trailing stop on the other half. The trailing stop was set to protect gains on the remaining half by setting a price at which my readers would automatically exit.
No sooner did we take the Free Trade than the stock began to correct.
But I wasn’t worried. After all, we had recouped all our original investment by taking the Free Trade… so we made money no matter what happened.
Fortunately, the company then reported great earnings, and the stock quickly advanced. We’re now sitting on gains of 125% on the free portion of this trade.
In addition, I have the trailing stop set so that we make 100% on the amount we still hold no matter what happens. In other words, we double our money even if the stock were to crash tomorrow.
Sometimes gains can come even faster…
Take LIN TV Corp. (NYSE:TVL), for example, another company I recommended in my Radical Technology Profits trading service.
We held this digital TV play for only three months before it zoomed past 100%. 102.17% to be exact.
At the time, I told my readers to take a Free Trade and sell half the holdings so we can get all our original money back and let the rest of it run.
“From here on out we are playing on the house’s money,” I told them.
Since this was a volatile stock we had held for only a short time , I gave it the benefit of the doubt and extended my trailing stop to 25%.
Six weeks later on March 18th of this year, the stock corrected on heavy volume.
We still exited with blended gains of roughly 87.5% in 4.5 months. That’s an annual run rate of 252%.
So, as you can see, in both of these examples, our Free Trade allowed us to cover our costs and end up with pure profit.
A few moves like that can really juice up your portfolio.
Which is exactly what our goal is here at Strategic Tech Investor.
And right now, I have another technology play that could offer not one but multiple double your money free trade opportunities. The profit potential is stunning. In fact, I put together a special presentation to show you all the details. Just click here to learn more.
[Editor’s Note: I welcome your comments, questions and suggestions. Post a comment below … I look forward to hearing from you.]