Chris Vermeulen, a seasoned financial expert with over 25 years of experience challenging conventional investing wisdom. Founder of TheTechnicalTraders.com, Chris advocates for an alternative approach called Asset Revesting, emphasizing owning only rising assets for higher returns and lower drawdowns. He authored “Technical Trading Mastery” and his latest book, “Asset Revesting,” delves into this innovative investment method. Chris’s philosophy prioritizes identifying and capitalizing on trends through technical analysis, steering investors away from the dangers of diversification and buy-and-hold strategies. Passionate about empowering investors, Chris is dedicated to sharing his knowledge to help others achieve financial independence.
Episode Highlights Here:
Brett Swarts:
Fantastic. And by the way, can learn more about Chris by going to the technical traders.com That’s technical traders.com I love all of that Chris, let’s dive right into the show which is building wealth using asset reinvesting. So Chris, what is the number one secret to building wealth using asset reinvesting?
Chris Vermeulen:
Well, yeah, to bring it down from a high level. So pretty much everyone does one or two of the the most popular types of trading and investing methods, they either do one they do the buy and hold your stock bond portfolio split, you park it, you leave it forever, that is a very risky way, especially if you’re in the later stages. If you’re close to retirement or retired, it is a great way to have very low average income because you’re gonna have some assets that are doing well but other ones that are tanking. And then when you you know blend those together, you end up with a really average return and that’s what the average buy and hold as you never see a buy and hold investor, retired 20 or 30 years younger, sooner, it takes time to make money that way and it is a roller coaster ride. You’ll go decades sometimes without really generating any real return if we have a multi year correction or something like that. The other extreme are the active traders. And there are numerous studies across North America, Japan, Taiwan, Brazil, that show that if you’re an active trader and you trade your money for more than 300 days, even during a bull market 97% of active traders lose money now I’ve been in the trading newsletter industry for over 25 years and it is a rotating door it is definitely a difficult people are struggling with their emotions. And so either one of those is very dangerous or high risk, and you either don’t make much money, it takes you forever, or you lose it trying to make high returns. And so what asset investing is, is kind of right in the middle. So the strategy that I deploy, we look at different asset classes, and we reinvest our capital only into one asset at a time. So, I mean, there’s a lot of things we could crack into here. But long story short is, the stock market is one asset class, it doesn’t matter if you own 400 stocks, you have ETFs, and all kinds of sectors. If you own a stock, it is this, it’s really just one asset class, the stock market is one asset bonds is another asset. Real estate is another, you know, startup, you know, there’s a there’s a lot of different types of assets. But what we do or what I focus on here is, if the stock market is favorable, that we want to put our money into the stock market, if it’s not favorable, we want to move to a different asset that is going to go up and benefit while the stock market is out of favor. And I do this with a what I call an asset hierarchy. And so at the top of our hierarchy is always going to be the most volatile asset now anyone can create an asset strategy around the assets that you like, there’s people who are in the precious metals and currencies, or Kryptos, or whatever. The one that I stick with my asset hierarchy, for example, is the stock indexes, US stock indexes are the top they’re the most volatile, the most stable still, they have lots of liquidity. And if they’re in favor, we want our money to be in there, because we can make some good returns very quickly. But if the stock market’s not favorable, then we want to go and look at Treasury bonds. And bonds aren’t favorable that we actually go and we look at the US Dollar Index. And if the dollar index isn’t favorable, we moved down to literally just an interest earning more or less sitting on the sidelines and cash collecting interest each day, while we wait for an asset to give us a new signal. And what’s really important about this as as the stock market goes out of favor, and we move down that hierarchy, each asset class is a slower and slower moving asset. So typically, as the markets get more out of control, we’re moving lower on that hierarchy to slower moving assets. And so our money is, is being a lot more safe, and has a lot less volatility when everything else is going haywire. So it’s really important to move away from volatility. And most people do the exact opposite. When there’s a lot of volatility, prices rallying or falling, they tend to move into options, they tend to use leveraged ETFs, to try and take advantage of picking bottoms or trying to profit from falling prices. And it’s really the wrong direction you want to go when things are volatile, you want to step back, let the markets reset. And then once a new trend is in place, by following the price action, then we move into whichever asset has kind of got the strongest trend on our hierarchy. That’s kind of it in a nutshell.
Brett Swarts:
Okay. That’s amazing. By the way, it means I need to get the book because that was that was a that was a big nutshell. But it was. Chris Vermaelen is spelled VREU le N, in case you’re not watching it on YouTube, if you watch on YouTube, you can see it on the on the on the sticker here. And it’s the technical traders.com that technical traders show calm. So although you’re located in Toronto, you serve clients in 80 Different countries mostly in the US. You know, let’s, in case you’re wondering if you live in the US where most of our listeners do, Chris can still help you out. Chris, what’s the number two? Question? What’s the number two secret to building wealth using asset investing?
Chris Vermeulen:
Well, it really comes down to risk and position management. And this is this is what most people really lack is a lot of things tie in, when it comes to the stock market, the stock market has a way of just getting its hooks sunk in into you in terms of your emotions, and a lot of people’s emotions take over and then your risk management goes out the window because you’re like, Well, I just got it now it’s tanking, I still like it, I’m gonna hold on to it or people don’t want to be proven wrong. If a stock gets hit, they’re like, I’ll just stay in there. Or if it’s making money, and this is this is what hurts people a lot is if something’s making money, they don’t actually start taking profits out and locking in gains and, and raising their stops, which is if it turns around, you want to make sure you get out. Problem is human psychology is you don’t want to get over something that’s winning. And you don’t want to get out of a loser because then you’re proven to be wrong. So that’s what happens to the average investor and why they end up buying low or sorry, buying high and selling low eventually when they can’t take the pain anymore. And it comes down to managing your position, your position sizing and having entries targets and stops in place and following them. So for example, when I was 16 years old, my mom dropped me off at the Collingwood airport, which is where I’m from and I got my pilot’s license and I remember the day she dropped me off my instructor said hey, go to the plane. I’ll meet you there. You’re doing your stuff. solo today and I just remember my heart stopping going, oh my gosh, I have to go flying on my own this is this the big day. And long story short, I get to the runway I take off and I’m past the the airport and suddenly, my emotions are flying high. I’m all over the place. But the training kicked back in. And what did I do, I put my hand on my leg on my checklist, I looked down and I just start working through that checklist at a time when I could not think straight, I was scared, I was excited. I was it was unbelievable moment. I worked myself down this checklist, I do the circuit, I land I pull off. And before I know it at the age of 16. I remember sitting on the runway going, I cannot believe I just flew a plane. And I didn’t crash and burn. And it was all because I followed a system. And so at the age of 16. It’s also the year that I got hooked on to the stock market I systemize I systemize everything in my life. Now everything is got processes. And you need to create a process, I actually have a course on this. If you try to create a process, you’re going to realize all the areas and the things you’re missing that you don’t have answers to. And by creating a checklist is how you actually create your strategy. Because a lot of people think they know what they’re doing. And they say I’ve got this strategy, I do this. But if you start grilling them and say what do you do in this scenario? What do you do in this scenario, they’re going to they’re going to realize how many voids and loopholes there are that they’re not covered. So this is the second secret is creating a strategy Systemising it following the strategy, and, and making sure you manage those positions or us as we know, investments, if they’re not managed, they can they can derail and they can set you back years or decades.
Brett Swarts:
Okay, that’s fantastic. I love that I’ve heard a saying that momentum is greater than the sum total of all the leadership strategy and resources combined. And so the question is, how do you activate momentum? And how do you sustain it? Well, part of how you sustain it is systems, right? systems and processes, like you’re saying, and that’s what helps us sustain it, igniting it takes, you know, you know, like vision, like clear vision and where you’re going right? And then you know, and then getting it getting it going take some belief like you have a clear belief on where you’re where you’re going. But then that system is what’s going to sustain it. So I love the way you put that helps to take some of the emotions out of it. Chris, what is the number three secret to building wealth using asset reinvesting?
Chris Vermeulen:
The third secret, I think, has to do with understanding who you are your personality types. So for example, a lot of people never ever think about this. And it’s, have you ever heard of the Myers Briggs test? Yes. So I wrote, I did an article on this I talked about a long time ago. But I think everybody should do the Myers Briggs, you do the quick test, it tells you what personality type you are. And I did a research report on it. There’s, you know, the 16 personality types and these 13 Out of the 16. Personality types don’t bode well, for people managing their money, they become very emotional. They’re there. They’re sensing individuals, they’re feeling individuals, they fall victim to emotional emotions taking over. And even if you’re a really dedicated expert in your field, can be a doctor, a lawyer, somebody who you think it’d be amazing at trading in the markets, when they get to the markets, they fall apart, and they lose a fortune. And it’s because the emotions creep into things. And they don’t have they don’t understand how their brain processes these emotions. It’s a very different game. And so if you do this test, and you realize the personality type you are, then you can figure out how your brain perceives and how it feels and how it reacts to market conditions and a lot. To me, there’s kind of three different types of personalities in terms of investors in the stock market, there’s people who, for example, I’m an INTJ. So I’m like a introverted in individual, but I’m very focused. My symbol is like, I’m a scientist. So I love numbers. I like Systemising. I like testing. I like all of that stuff. So somebody like me, I can go and do this on my own, I create a system I follow it, the more you follow it, the more comfortable you are, the more you believe in it. And then you just run the system and you just follow through no matter how you feel, you just do what it says. Then there’s another group of individuals that are pretty good. They just need a helping hand they need signals to follow. They need a little bit of guidance, but they can execute the trades themselves. And then there’s another group of individuals who are just way too emotional, and they just need it done for them. And that’s where a lot of people go to an advisor or have an auto trading strategy, something like that. So you need to figure out if you can follow through on trading or investing so for example, if you have an investing signal from something whatever you’re interested in, but you don’t pull the trigger your your gun shy, you come up with excuses, you start looking at other people’s opinions, you start to get mixed feelings. You know, if you have that personality type then you kind of almost needed done for you because it’s going to cause major problems. So knowing who you are and what level of expertise you need to help you navigate the markets, if you have one of these 13 personality types that don’t bode well, you can still do exceptionally well in the market, you can do just as well as anyone with with a different type of personality that might favorite if you just have the proper support to guide you. So it’s knowing who you are really.
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About Chris Vermeulen
Chris Vermeulen is a financial expert who challenges conventional investing wisdom and believes that investors should only own rising assets. With over 25 years of experience, Chris shares an alternative investment style called Asset Revesting that allows investors to achieve higher returns, lower drawdowns, and profit from bear markets.
Chris founded TheTechnicalTraders.com, a platform that provides investors with Asset Revesting signals and education on using technical analysis and position and risk management. He is also the author of the books “Technical Trading Mastery” and “Asset Revesting,” his newest book, which explores this innovative investment method.
Chris’ investment philosophy is grounded in the belief that diversification and the buy-and-hold strategy can be dangerous for mature investors. Instead, he advocates for only owning assets that are rising in value, selling those that are in decline, and using technical analysis to identify and confirm these trends and price action. This approach helps investors achieve above-average returns while minimizing risk.
He is passionate about sharing his investment knowledge with others and is dedicated to helping investors achieve financial independence.
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