FOR­GET THE 401(K): THIS MIL­LEN­NIAL DOES THE TRAD­ING HIM­SELF

With a backup for ‘what-ifs,’ 24-year-old says he goes ‘all in’

USA TODAY International Edition - - MONEY - Tan­isha A. Sykes

Mar­ket traders such as James Pol­lard don’t al­ways play by the tra­di­tional rules of in­vest­ing.

For in­stance, Pol­lard, 24, a mar­ket­ing con­sul­tant and owner of TheAd­vi­sorCoach.com, which helps fi­nan­cial ad­vis­ers at­tract new clients, prefers easy ac­cess to his hard-earned cash.

“I’d rather have ac­cess to my money us­ing stock trad­ing ac­counts like Robin­hood in­stead of ty­ing it up in a 401(k) or IRA.”

While he takes a lot of heat for such com­ments, he’s not your typ­i­cal brash, fast-talk­ing trader.

“I’ve been trad­ing since 2011, after read­ing sev­eral books on the sub­ject,” says Pol­lard, a Uni­ver­sity of Delaware alum. His fa­vorites in­clude Se­crets for Profit­ing in Bull and Bear Mar­kets by Stan We­in­stein and Tech­ni­cal Anal­y­sis of the Fi­nan­cial Mar­kets by John

J. Mur­phy.

Be­fore mak­ing any sig­nif­i­cant trades, he stock­piled his cash. That strat­egy, com­bined with run­ning a com­pany that is on track to earn six fig­ures by year’s end, helped him shore up his funds. “I ac­tu­ally save 60% to 70% of my in­come per month into var­i­ous div­i­dend stocks,” Pol­lard says. “When­ever a div­i­dend poses a good deal, I buy.”

In ad­di­tion, as the owner of his Ne­wark, Del.-based ad­vi­sory firm, he has more than two years of emer­gency ex­penses set aside. “Know­ing that I have a good amount saved up helps me to man­age the ‘what-ifs,’ ” he says.

What’s more, he is not trad­ing in­ces­santly through­out the day but does pull the trig­ger at least twice weekly. His in­vest­ments fluc­tu­ate, al­though he keeps a steady mix of blue chips — high­qual­ity busi­nesses that have steady prof­its and re­li­able div­i­dends — such as Exxon, GE and AT&T.

He also dab­bles in more spec­u­la­tive ac­tiv­ity, in­vest­ing in prod­ucts such as Bit­coin and Ethereum. The price of both dig­i­tal cur­ren­cies has soared since last year. Bit­coin prices in­creased to al­most $5,000 in mid-Oc­to­ber from $635 a year ago.

To date, Pol­lard states that he has lost and won thou­sands in a sin­gle day. To fund his trad­ing ac­tiv­i­ties, he keeps at least $25,000 in liq­uid as­sets in a bro­ker­age plat­form with money ear­marked for trad­ing. “I only trade with 5% of my trad­ing cap­i­tal at any given time,” he says. “It isn’t in­come or pay, it’s 5% of the money I set aside to use for trad­ing.”

He never wor­ries about “go­ing all in” be­cause as he points out: “I’m ex­tremely dis­ci­plined that way, and I’ve seen too many peo­ple lose a lot of money de­vi­at­ing from their own rules.”

De­spite his pen­chant for mar­ket trad­ing, Pol­lard of­fers this ad­vice to other Mil­len­ni­als: “It def­i­nitely shouldn’t be con­sid­ered your en­tire re­tire­ment strat­egy. If you learn what you have to do, then wait for the op­por­tu­nity, you can make it work.”

Car­los Dias Jr., a wealth man­ager and fi­nan­cial ad­viser at MVP Wealth Man­age­ment Group and Ex­cel Tax & Wealth Group in Or­lando, says as a pas­sive in­vestor, James is buy­ing and hold­ing the right com­pa­nies such as AT&T. How­ever, as a day trader, price fluc­tu­a­tions and trans­ac­tion fees can be prob­lem­atic.

“You can make some real money trad­ing, but you re­ally have to know what you are do­ing,” Dias says. “James sounds like he is more of a buy-and-hold in­vestor fo­cus­ing on large com­pa­nies that pro­vide sta­bil­ity through div­i­dends, but he has to think about how to save some money for the fu­ture.”

Dias has this ad­vice: uBe­ware of keep­ing too

much cash. If Pol­lard were ever sued, a lit­i­gant could come after his cash ac­counts.

uPro­tect your port­fo­lio.

“Don’t just look at the prof­its you can make, look at how much you can lose on one trans­ac­tion or mul­ti­ple trans­ac­tions,” Dias says. In­stead of chas­ing re­turns, set aside a small amount of money to in­vest.

“I’d rather have ac­cess to my money us­ing stock trad­ing ac­counts like Robin­hood in­stead of ty­ing it up in a 401(k) or IRA.”

James Pol­lard, 24, a mar­ket­ing con­sul­tant and owner of TheAd­vi­sorCoach.com

GETTY IM­AGES/ISTOCKPHOTO

Price fluc­tu­a­tions and trans­ac­tion fees can be prob­lem­atic for day traders, ex­perts warn.

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