Passive investing is all the rage, right? In 2023, passive funds finally overtook active funds, stacking up a jaw-dropping $13.3 trillion in assets globally. But while everyone seems to be jumping on the passive investing bandwagon, pro trader Tom Sosnoff, co-founder of tastytrade and tastylive, is here with a spicy take: Bet on yourself instead of passive funds. 😎💥
Passive = Risky? 😳💤
Sosnoff is no stranger to trading — he’s spent decades in the trenches, from trading pits to trading screens. His argument? Set-it-and-forget-it passive investing could actually be riskier than active trading. Why? He thinks passive investing can make you complacent, leaving you clueless about how markets work by the time you hit 60. 🤯⏳
“You close your eyes, take a nap, and wake up at 60 — and you don’t know how markets work,” Sosnoff said on Stocks in Translation. 🎧👀
Active Trading = Real-World Education 🎓📈
For Sosnoff, active trading is more than just a strategy — it’s an education. 💡 He believes it teaches you about risk management, market mechanics, and making real-time decisions. Losses? Think of them as tuition fees for learning how to play the game. 🧠🎲
On the flip side, while many financial experts preach the gospel of passive investing, Sosnoff thinks learning how to navigate market volatility gives traders the upper hand in seizing opportunities others might miss. 🌪️⚡
Volatility: The “True Math Equation” in Finance 📊💥
Sosnoff has a wild take on volatility, which most investors run from like it’s a fire alarm. 🔥 But for him, volatility is the only true math equation in finance. While prices don’t always revert to the mean, volatility does. So, what’s the play here? Instead of fearing volatility, Sosnoff sees it as an opportunity, especially for traders who know how to sell options and take advantage of short-term inefficiencies. 🎯🛠️
Risk Control: You Got This! 💪🎯
Let’s be real — selling options can be risky (like, really risky), but Sosnoff believes that risk in finance is often overblown. 😱🤷♂️
“Risk is something you can’t control, like another car hitting you,” he said. But what you can control? Position size and diversification. 🙌
For Sosnoff, keeping your investments small and spreading them across multiple assets helps define and limit your risk. Simple as that. “Anybody can do it,” he assured. 🔑📉
Bottom Line: Take the Wheel on Your Financial Journey 🛣️💼
At the heart of Sosnoff’s philosophy is taking control of your financial destiny. Active trading teaches you how to make decisions, take risks, and assess probabilities. And hey, if it’s not your vibe, you can always hop back into passive investing. But Sosnoff’s challenge? Don’t sleep on your potential to make moves in the market. 💪💸
So, whether you’re a newbie or seasoned pro, Sosnoff’s message is clear: Bet on yourself. 🎲 Are you ready to take control? 🤔🔥
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