TWO PERCENT GOAL TO FINANCIAL INDEPENDENCE
Al O’Grady
Hi, my name is Al O’Grady, and I am the founder of Two Percent Goal to Financial Independence. With a degree in Economics and over fifteen years of experience in financial services, including completing the Canadian Securities Course, I’ve learned what works and what doesn’t in the financial world. This experience has made me a wiser investor, helping me achieve my goals in life.
Why Investments Fail
The Key to Successful Investing
The reason people fail with their investments is simple: they lack a goal, a plan, and the self-discipline to follow through. I highly recommend the book “Think and Grow Rich” by Napoleon Hill, which includes a powerful quote: “Vague goals produce vague results.” Many people say they want to get rich, but what does that mean? How much do they want to make, and by when? Such statements are too vague and subjective.
Without a specific goal or timeline, investors get caught up in the hype when their stock goes up and don’t know when to sell, often becoming greedy. If the stock climbs and then falls, their emotions take over, and they hope it will rise again. Hope is not an investment plan.
Achieving Financial Success: The 2% Weekly Goal
My Goal
My goal is simple. It’s precise and has no subjectivity. I am trying to double my money each year with little to no risk. That may seem to be unrealistic but if you keep it simple, take what the market will give you, don’t get greedy, have the self discipline to execute the model and do not allow emotion to cloud your judgment, it can happen. What’s my goal? I’m looking to make 2% per week, that’s it. Get in, get out, and do it within a week. The goal is clear, specific, has a definite timeline and no room for subjectivity. If you could make 2% per week, over a 52-week period, that’s 104% per year. That’s simple arithmetic that we can all grasp but if you reinvest your gain and take into consideration compound interest, 2% compounded means you could double your initial investment in 36 weeks and not 52.
OK, that’s the goal, what’s the plan?
My Plan
How to Remove Emotion from Stock Trading: My 10 Essential Rules for Success
Here is what I do. The most important thing is to follow EVERY rule. By doing this you take emotion out of it, and you don’t get caught up in the hype when the stock is climbing or play the hope game when the stock declines. Here are my rules:
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Invest only in the 500 large cap stocks on the New York Stock Exchange.
- Only invest in the top companies in the number one economy in the world. This helps minimize risk and increase your chances of success.
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Look at the S&P 500 Large Cap Index.
- A rising tide raises all ships. Quite simply only go long when this index is bullish and only go short when bearish. Look at the chart below for the S&P 500 Large Cap Index. (Full disclosure. I have no relationship with stockcharts.com. Feel free to use any chart provider you wish). I strongly recommend you do some research on the MACD. It is an exponential moving average that I highly endorse.
- Look at the black line of the MACD. There is a 1:1 correlation between the slope of this line and the direction of the index. When the slope is upwards, the index is bullish, and you only go long. When the slope is downwards, the index is bearish, and you should only short. If it’s going sideways, maintain your path until it reverses the trend.
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Look at the 50 day and 200 day moving averages.
- After looking at the market from a macro perspective, look at individual companies. When going long on a stock, the 50-day moving average MUST be above the 200-day moving average. NO EXCEPTIONS You want the stock to be in a climbing mode and you want to ride that trend.
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In the above chart for IBM the blue line represents the 50-day average while the red line is the 200-day average. For the entire year, the 50-day average was above the 200-day average where it must be when buying a stock.
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Redundant MACD signals.
- At this point you need the company’s MACD to show two things. First, it has to go from negative to positive territory. Second, the two MACD lines have to intersect above the zero line. This is the final confirmation point that you need. It is coming out of weakness. It is picking up strength and that strength has been confirmed. YOU MUST BUY THE STOCK THAT DAY. YOU CANNOT WAIT.
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Look at the above chart for Broadcom Inc (AVGO). In the fall of 2023, the MACD was below the zero line. It crossed into positive territory and intersected Dec 12. The S&P Large Cap Index had a positive sloping MACD on that day as well. In the spring of 2024, the same signals were present. The MACD was in negative territory in May. It crossed the zero line and the two MACD lines crossed June 11 with the S&P Large Cap Index showing a bullish positive sloped MACD as well.
To summarize, the slope of the MACD of the S&P Large Cap Index has to be heading upwards, the individual company must have its 50-day moving average above its 200-day average; the company’s MACD has to come from negative to positive territory, finally it has to intersect above the zero line. That is the precise day you buy the stock.
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Use the 2% Goal.
- When your stock order is filled. Multiply that price by 1.02. That is your goal. That is your 2% price gain. You don’t need to watch the stock during the day. This is not a day trading plan. Go about your life. Watch the closing price sometime that night. Quite often the closing price will exceed the 2% gain in the next 2-3 days. It could even happen the same day you bought it. Once it surpasses the 2% goal, it’s time to lock in your profits..
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Use Stop Losses.
- This is a must. Use stop losses to protect yourself in the unlikely event of an unexpected drop but also use stop losses to lock in your profits. If the stock price falls, you want to minimize losses. After the trade is filled, put in a stop loss 3% below the fill price to protect yourself.
- You also want to use stop losses to lock in profits and exit the trade. Once the closing price surpasses the 2% goal, change your stop loss to the 2% target. This allows you to take advantage of a major upswing and earn more than 2% while also exiting the trade at your 2% goal.
- For example, let’s say you bought a stock at $100. Your goal is $102 (a 2% gain). Let’s say in three days the closing price was $102.75. The closing price surpassed your 2% target. You set your stop loss at $102. The next day if the intra day price fell below $102, 01, your stop loss would be triggered selling your stock at $102 making your 2% goal. This situation will happen many times. Now how do you take advantage of a major upswing?
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Use Stop Losses to Ride the Wave.
- By using stop losses you can also ride the wave and make more than your 2% goal. Again, let’s say you entered a trade at $100. Your goal is $102. Let’s say in three days the stock surpassed your 2% goal and closed at $102.75. You set your stop loss at $102 to guarantee a 2% return. Now let’s say the intra day low price the next day only went down to $102.50. Your stop loss order was not filled. GREAT.
- Revise your stop loss to $102.49. Let’s say the stock is climbing and the next day the intra day low was $102.75. EVEN BETTER. You revise your stop loss to $102.74. Each day you keep revising your stop loss order so that the trigger price is one penny lower than the previous intra day low.
- You repeat this process daily. Sooner or later there will be a down day and your stop loss order will be filled. You will have taken advantage of a major upswing while still guaranteeing your minimum goal.
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Go Short Too.
- This process works very well for shorting stocks as well. Everything is reversed. The slope of the MACD S&P 500 Large Cap Index has to be pointing down. The 50-day average is below the 200-day average. The MACD has to come from positive territory to negative territory. The MACD lines have to intersect and confirm below the zero line. Short the stock that day. Look for a 2% drop as that is your goal. Use a stop gain order to lock in profits or minimize losses.
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Consider Leverage.
- This point is strictly optional, and it may well be outside your risk tolerances, and I get that, but if you are getting close to 2% per week virtually risk free, you can double or triple that by buying your stocks on margin with confidence.
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Repeat.
- A 2% gain doesn’t sound like much but if you can do it every week, you will generate a great annual return with very little risk. This method is not flashy; it’s not sexy; it’s boring, and it works.
Just How Accurate is This?
These are the actual results from July 1, 2023 – June 30, 2024
Going Long
- There were 204 times a company met the criteria and gained 2% or more
- The total average gain was 3.27%
- Stocks gained 10% or more 9 times
- Stocks gained 5-10% 12 times
- 115 times the stock did not meet the 2% target
- 11 of those 115 times the stock showed a minimal profit but fell short of the 2% target
- The average loss was 1.79%
- Winning Stocks reached their 2% goal on average in 3.05 trading days
- Winning Stocks were held on average 5.07 trading days
- Losing Stocks were held on average 4.87 trading days
Going Short
- 56 times the stock pattern met the criteria for selling short and earned at least 2%
- The average gain was 3.43%
- There was a 10% or more gain on one occasion
- Eight times the stock gained 5-10%
- The average gain was 3.43%
- The stock met its 2% goal on average in 2.11 trading days
- The stock was held on average 4.11 trading days
- 24 times did not meet the 2% target
- 2 of those 24 times it showed a miniscule profit but did not meet the 2% goal
- Average loss was 1.68%
- Shorted stocks that lost were held on average 4.04 trading days
Total Summary
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Category |
Description |
Value |
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Wins |
Going long |
204 wins x 3.27% average = 667.08% gain |
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Going short |
56 wins x 3.43% average = 192.08% gain |
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Total wins |
859.16% gain |
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Losses |
Going long |
115 losses x 1.79% average = 205.85% loss |
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Going short |
24 losses x 1.68% average = 40.32% loss |
|
|
Total losses |
246.17% loss |
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|
Total Wins |
859.16% |
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Total Losses |
246.17% |
|
|
Net Gain |
612.99% |
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Total long and short opportunities |
399 |
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Net Average Gain |
1.54% |
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Days Achieved |
4.97 days |
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Now you may say that I am not reaching my 2% target, but my ultimate goal is to double my money within a year virtually risk free. When you factor compound interest, a 1.65% return every week doubles in 43 weeks. If you use a margin account, the goal can be reached even faster.
You can do this. It is a simple process with modest goals, minimal risk and excellent returns. It takes diligence, self discipline, a strong desire for financial independence and persistence. How badly do you want it? You can do this.
OR
For a monthly fee, I can do it for you. I will tell you what stock to buy (long or short), a suggested stop loss for protection, and your 2% goal. I will tell you when your stock has hit its 2% target and what stop loss to use. If the stock is in a major uptrend, I will tell you what your revised stop loss should be on a daily basis. I will give you the information, you just need to exercise the trade itself on your self-directed trading account.
My monthly fee is $99 and it’s worth every penny. Let’s say you have $50,000 to invest. One 2% transaction means you earned $1,000 which has covered my fee TEN TIMES. The thing is, it’s not uncommon to do 3 or 4 transactions each month. Even a portfolio as low as $10,000 covers the fee with one transaction.
Don’t Believe a Word I Say
If you’re skeptical and think I’m full of hot air, I get it. That’s why I will give you the first 30 days FREE. If you sign up. I will send you notifications when to buy a stock that’s poised for a 2% jump. I’ll give you stop loss orders to protect yourself and when to exit a profitable trade. I will also send you my data where I have back tested the 500- large cap companies on the NYSE. You can examine this free of charge. There is no risk to you at all. You have everything to gain and nothing to lose. After your free 30-day trial, you can exit the program at any time. Take control of your future, take control of your life. Get started on the 2% goal to financial independence right now.
While the test data is overwhelmingly positive, there are risks with this type of investing and the author accepts no responsibility for any possible losses.