Investing With Neon Funding
Updated: Jun 27
27 May can be marked as another dark day which showed us how evil society can be. Being a critic of racial discrimination, I strongly condemn the activities conducted by Minneapolis officers. With faith in the law, I hope justice would is done and strict actions would be taken. #GeorgeFloyd #Balcklivesmatter
Moving on to the days topic. Tuesday showed some promising gains in Dow Jones industrial average post memorial day signalling the crisis has passed after Moderna's RNA vaccine showed positive results but the question is whether this rally would sustain long enough? Will the economy revive soon enough to save the different sectors?
Looking at the various aspects, I believe(I can be wrong.) there is a strong chance of downwards move in the market as leading researchers say it can take another 14-18 months before the world would get access to any vaccine.
Personal Finance Management
Personal finance is the process of planning and managing personal financial activities it can be related to generating income, expenditure, saving and investing.
As discussed in the previous blog, managing your personal finance can be an easy process in spite of looking daunting. Tough times like now put you to test and sometimes will bring changes in you and if you have not been managing your finances you will be at least compelled to think about it.
'Double down strategy' with Neon Funding
Double down strategy or popularly known as martingale strategy in the betting world. Here, the gambler increases or even doubles his bet after every loss so that his first win would recover all the previous losses and even make a profit.
Statistically speaking this strategy would work the best with an unlimited resource in the gambling world but in real-world, the gambler ends up losing all his capital with no money to bet further and the casino proves to be the real winner in this case.
Now when it comes to investing in mutual funds, index funds or equity this strategy is gaining popularity. Double down strategy can be applied when the markets are crashing When you buy on dips, you end up averaging the cost per unit and as the market is falling the price comes to a lower value. Application of Double down also eradicates the FOMO (fear of missing out) which is a common market sentiment which often forces you to make bad decisions.
Understand the application with the following example:
Rustom had $1000 and he decided to make the investment in Tesla (CMP: $817/share). Now the investments will be in three instalments (Number of instalments depends on choice and funds available with the investor), now while buying the stocks the instalments can be as follows.
First Installment: Can be of $1500 when the share price is at 750
Second Installment: Investing$3000when the share price is around $700.
Final Installment: Investing the remaining sum when the share price falls below $650.
The thumb rule being investing more when the prices fall.
Disclaimer: Consult a financial advisor before acting on the above strategy. We would not be responsible for any of your losses.