You know what it is. That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It's the Money Talk with Tiff podcast. Hey, hey, hey. And welcome to another episode of Tiffany's Take, where I answer your money questions right here on the podcast. So if you want your question answered, go to moneytalkwitht.com Ask Tiffany, and I'll be more than happy to answer for you. There is an option
on there for you to record your voice, which I'll. I would love to hear you all's lovely voices. So if you are brave enough, please, please, please make sure you send those, those over to me. But for the purposes of this episode, you all love this investment thing, so we're going to keep this investment train going. Someone asks, well, Tiffany, I heard the other episodes and that all sounds great, but I'm already an experienced
investor. I already know this stuff. What are some things that I can do? And so I was like, you know what? Let me do an episode on some advanced investment strategies. So this is for people that are already investing in stuff. They're already, you know, in stocks, bonds, you know, whatever it is that they decided to do. And now they're looking for other ways to diversify their portfolios. And so I'll go over what these options are. Some benefits to them, some risk to
them, and maybe just a quick tip for each. All right? So first and foremost, there's options trading. So options options give the investors the right, but not the obligation to buy or sell an asset at a predetermined price before a specific date. So if you already have individual stocks, let's say you already have Apple, right? You have one share of Apple. You can allow someone the option to buy or sell your asset at a predetermined price. So at a price that you charge, if that makes sense.
So this strategy can be used to hedge against potential losses or speculate on price movements. If you know that, let's say Apple's gonna go down, you can give somebody the option to sell the Apple, but you still make money on top of that. So the benefits to this is it offers leverage and flexibility. You can enhance your returns and manage your risk. Some risks to this, it is complex to learn. You have to know what calls are, what puts are, what options are like. It's
very complex. I remember I learned this when I was in my master's program in my investing class, and it was giving me a headache. I had to really sit down and wrap my mind around how it all works. I get it now. But it is very complex and it's also volatile. So there's a potential for significant losses if you don't do it correctly. I will link to an episode I did with an options
expert who kind of explained it more in detail. But one tip with this is to gain a solid understanding of what options are and consider using them in a diversified strategy. So make sure options is not your only thing that you're doing because of the risk factor. But this can be something in addition to once you learn more about it. Another thing that you can do is short selling. So short selling is selling borrowed stocks with the intention of buying them
back at a lower price. So this strategy profits from a decline in the assets price. So if going back to the first example, if you know that Apple's about to drop, you can short sell Apple. And as it drops, you make more money because you already bet that it was going to drop. Really, the stock market is just betting for the most part. So anyway, that's short selling. So some benefits to that potential to profit in a falling market. So it can also be a hedge
against other portfolio risks. So if you know that something's going to drop, you can do a short sell on it and that can level out how much you lose with that. Some risk to it, though it's unlimited loss potential if the stock price rises. So if you. If the price rises, you start losing money because it's opposite of just regularly trading. And so it requires precise timing and market insight. Like you really have to know what's going on in the market in order to time things correctly, which
I said is very hard to time the market. But that's part of the short selling strategy. So use this strategy cautiously and consider pairing it with other risk management techniques. Techniques. I remember when I was doing the stock market challenges in my Facebook group, which I might bring it back. I don't have the Facebook group anymore, but I might bring back the stock market challenges in my community. But what that is is we
have fake money to use. And that's one thing that I use to try out options, to try out short selling, to try out all of these different things that I'm talking about today. Because there's no real risk involved. You can see how the money's gonna fluctuate. You can practice things like that. So I rec learning in that way where you don't have to risk your own money. So I'll let y'all know if I restart the Stock market challenge. Another thing you can do is margin trading. So that's trading with
borrowed funds to increase the size of a position. So trading margins, sometimes people call it, this strategy amplifies potential gains and losses. So some benefits to that and enhances purchase purchasing power and potential returns. Some risks you can have magnified losses. So if you're already losing, you're going to lose even more because now you're trading on the margin. Margin calls can force investors to sell at unfavorable times.
So when you may not have sold regularly, if you're trading on the margin, you might sell because you don't want to risk too much. So those are some risks involved. So I would say only use margin trading if you have a high risk tolerance and a solid risk management plan. So you have high risk tolerance and capacity, really, and you already know what you're going to do if things go south. Okay. And the last advanced investment strategy I'll mention is hedge
funds. So these are pooled investment vehicles that use a variety of strategies to earn active returns for their investors. They can invest in a wide range of assets. So with hedge funds, now with hedge hedge funds, most of the time you do have to be an accredited investor, which, which I talked about in an episode. I'll have to find it. I'll put it in the show notes. But you usually have to be an
accredited investor. Some benefits to this is access to sophisticated strategies and professional management and a potential for high returns. Most hedge fund managers, they are the ones managing the money. They just pool everybody's money together. So if you're familiar with the term Ponzi scheme, most popular person in recent time was Bernie Madoff. He was kind of like a hedge fund manager where they pull people's money, put it in things, and then, you know, make the money.
But with that being said, you have to be very careful because sometimes it can be something like Bernie Madoff had going on. So that leads me to the risk. There's high fees, less liquidity, and it's complex strategies that may or may not be transparent. So you may not know what's going on. So my tip is to thoroughly research hedge funds and consider your investment goals and risk tolerance before investing. Make sure that you are familiar with who's going to be managing your money
and things of that nature. Because people have lost hundreds of thousands of dollars in hedge funds that weren't properly ran. So those are a few advanced investment strategies that you can take advantage of. This can open doors to new opportunities, but they also carry more risk than
the things that I've talked about before. So ensure that you have a comprehensive understanding of these methods and don't hesitate to seek advice from financial professionals that know what they're talking about to align these strategies with your overall investment goals. So hopefully that was helpful. And if you have any more questions for me, feel free to go to www.moneytalkwitht.com
asktiffany and I'll be more than happy to answer. We can keep this investment train going or y'all can ask some new questions. It's completely up to, but thank you so much for listening and I'll see you next week. Bye. Thank you for listening, joining and being a part of the Money Talk with Tiff podcast this
week. You can check Tiff out every Thursday for a new Money Talk podcast, but if you just can't wait until next week, you can listen to previous podcast [email protected] or follow TIFF on all social media platforms at Money Talk with T. Until next time. Spend wise by spending less than you make. A word to the money wise is always sufficient.