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Tom Gentile of Money Morning: “Most experts out there will tell you there is no other place to put your money because of the paltry returns”

Most experts out there will tell you there is no other place to put your money because of the paltry returns. If you believe that, then simply investing in work from home stocks over the long term may be the best idea, especially if you’re 10 years or more from retirement. Remember this pandemic is […]

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Most experts out there will tell you there is no other place to put your money because of the paltry returns. If you believe that, then simply investing in work from home stocks over the long term may be the best idea, especially if you’re 10 years or more from retirement. Remember this pandemic is not more than the blink of an eye in the grand scheme of things. You shouldn’t change your investment strategies around just this event. I am also keeping cash on hand for the uncertainty that’s likely to come in the next year, and for the buying opportunities that accompany it.


As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Tom Gentile.

Tom Gentile, is an options trading specialist for Money Morning who is also known as America’s №1 Pattern Trader. In one of his recent articles, Tom said of options trading “the lower your initial cost is, the lower your risk”. Wouldn’t that be nice to have in your pocket in the current volatile market?

Tom is one of the world’s foremost authorities on options trading. He’s taught more than 300,000 traders his option trading secrets in a variety of settings, including seminars, workshops, and sponsored events like The Money Show. He’s also a bestselling author of eight books and training courses.


Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

When I was a teenager growing up in a middle class family, my father had a digital clock radio in the kitchen where we had dinner each night, and each night he played WSB talk radio, of which we listened to business and talk quite often. That started the process…

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

Working downtown in Manhattan in my late 20s I remember my boss putting me near what he thought was the worst trader he ever knew, who lived on greed and fear. He told me whatever this guy did, let him know so he could do the opposite. That was my first introduction to trading against the herd.

Are you working on any exciting new projects now? How do you think that will help people?

I have been for the last year or so developing apps that are based on seasonal and technical scans to help people understand unemotional rules-based trading. Though nothing is 100% in trading, I have found that trading with a set of rules beats emotional seat of your pants trading nearly any day.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

So many people who know me know that I got my start in trading from George Fontanills. I got to visit the American Stock Exchange back in the early 90s, and there was this guy ranting and raving as all the power was out at his booth. I went up there and to make a long story short, there was a spiderweb of power cords in which one was unplugged, causing no power to his trading booth. I didn’t plug it back in right away, as I saw this as an opportunity to talk to the guy. Eventually I did plug it in, restored power to his trading booth, and what started out as a freak introduction led to a job and eventually a partnership. Optionetics became one of the biggest options education firms in the world, which was eventually sold to one of the largest brokerage firms in the world. All from that occurrence.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

First, when I get anxious or depressed from the moment (and believe me we all do) it usually stems from watching too much TV or being on social media. So, the quickest way to get rid of those fears is to simply turn everything off for a while. Get a good book. Find a quiet place and take yourself out of the situation even just for a while. Right now, I am reading “Good Company” by Arthur Blank, former CEO of Home Depot and one of my former bosses. What a great read, and it talks a lot about the kindness of people and what you get by serving others.

Second, use technology for some good. During Yellow Fever, people stayed away and had no idea how friends, family, or loved ones were doing other than a rare letter they received. Now it’s as simple as a phone call or video chat, which makes you feel like that person is in the same room with you. It’s interesting that technology both depresses us and elevates us through enhanced communication. Use it for the latter…

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing 500 dollars every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

My main concern right now is that the government will continue to try and print their way out of this pandemic, causing inflation to creep in. My family and I are now investing into two areas. Hard public assets and private managed fixed returns. The first two are easy to understand… gold and silver are hard assets that typically rise as the dollar falls and the easiest way to mimic this in the stock market is buying the GLD ETF. Silver’s ETF symbol is SLV. So far this year these two ETFs are up double digits, and I believe they will continue even with a drop in the stock markets. I think the next move will be in agricultural ETFs like DBC, which are down this year, but could make an upward run if inflation starts to tick up. Private managed assets include crowdfunding into everything from rental real estate to vessel deconstruction, where a ship is stripped down to its bare metal and sold as scrap. Companies like YieldStreet and FundRise offer some great opportunities with annual high single or low double-digit returns, but its best to get knowledgeable about these offerings and of course consult an expert before investing here.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

Well it’s no surprise to many that the tech sector has led the pack in the recovery, and it seems like work from home will become the new normal. But there are other pockets of growth out there too, especially in-home improvement, delivery, and on demand entertainment. This has been what has driven FAANG stocks to new post recovery highs. But as the easy money has happened, it’s going to become harder for these new highs to continue.

Most experts out there will tell you there is no other place to put your money because of the paltry returns. If you believe that, then simply investing in work from home stocks over the long term may be the best idea, especially if you’re 10 years or more from retirement. Remember this pandemic is not more than the blink of an eye in the grand scheme of things. You shouldn’t change your investment strategies around just this event. I am also keeping cash on hand for the uncertainty that’s likely to come in the next year, and for the buying opportunities that accompany it.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

FAANG stocks are already in pullback mode from their recent melt ups and will provide some great buying points in the future. I am currently looking at pullback opportunities for each, using the lows in March to the highs in September and then taking 38–50% off those moves for buy points. For instance, Apple went from a low in March of 56.09 dollars to a high in September of 134.18 dollars. A 38% pullback puts Apple near 104 dollars, a technical buy in my opinion.

Are there alternative investments that you think more people should look more deeply at?

If you’re an option trader, one of the best strategies that has worked this year involves cash secured puts. This involves selling put options, and the seller gets paid a premium to do so, all while obligating themselves to purchase the stock. The good news is that you can decide where you want to buy the stock at, though you’re not guaranteed you will get it. What you will get is a premium for doing so. It does take a bit of knowledge on the investor’s part, but with volatility at multi-year highs, it’s one of the best strategies around.

If a person in their thirties and forties came to you today and said that they have 10,000 dollars that they want to put away today for a long term investment what would you advise them to do with it?

I would tell them to take a look at the most popular, most liquid stocks out there that are currently making revenues and profit and see where they are on the chart. For instance, if you look at Apple, it’s quite a value when looking at the tech stocks as a whole. Do that with a few other sectors that are benefitting from the work from home era, such as an Amazon, Home Depot, Walmart, McDonalds, etc. All while keeping in mind that you have 25–35 years before retirement. I would also continue to build this account through contributions and average into your investments over time.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

Well I am also a father of college age kids who managed to either get through school on scholarships or cash. Some of my kids went straight into the workforce. Either way I am telling them in no uncertain terms this… Stay home as long as possible. Don’t get yourself in debt by any means. Save at least 50% of your paycheck and start investing it now. Get a Roth IRA and max it out each year. Get familiar with digital technology such as bitcoin, that’s the future of cash whether the government embraces it now or later. Get a brokerage account and start buying stocks of companies that you know and use and are a satisfied customer of. Most of my kids have Robinhood accounts and invest in things like Starbucks, Intel, McDonalds, Delta Airlines, even Royal Caribbean. They ask my feelings on these stocks, but I really don’t want to sway them, just as I wouldn’t want anyone else swaying me about my investments.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Once is a Chance, Twice is Luck, but Three Times is a Pattern…

I find myself saying this over and over whether is investing in the markets or relationships with people, whether good or bad.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

I’m a capitalist, and there’s a cause and effect that happens with each decision made. I do give a great deal to many causes, but the one that I am most passionate about the unnecessary use of plastics and their toll on the world. Removing plastic straws was a start but this needs to be expanded to plastic bottles and bags if we really want to tackle the problem. These two non-essentials create more consumer trash that end up in our oceans than anything I can think of.

What I noticed in New York after replacing plastic bags with paper was twofold. First, no more plastic bags for groceries, packages, etc. Second, you have to pay 5 cents for a paper bag so you think before buying it. Talking to some of the folks at Walgreens in NY, they say that more than half of consumers don’t buy the paper bag. That’s a win-win and should be rolled out nationwide! Donating to sensible causes like this is what I will continue to do.

Thank you for the interview. We wish you only continued success!

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