Here are the financial returns for individuals who thought inside the box, out of the box and SMASHED THE BOX over a 10 year period.
Inside the box- .17%- 1.988%/ Savings account & CD
Outside the box- 2.6%/ Blend of equities & fixed income
SMASHED THE BOX- 306%/ IBB Biotech ETF
SMASH THE BOX IS NOT ABOUT AVERAGE RETURNS, IT’S ABOUT EXTRAORDINARY RETURNS WHETHER PERSONALLY OR PROFESSIONALLY.
Today everyone wants to mitigate risk and receive the highest return possible. The problem arises when one reduces risk they reduce their return. Let’s take a look at an individual wanting to mitigate his or her financial risks with the following choices on where to put their money:
Option #1- Bank Interest- 0.17%*/ 1 year average
Option #2- Certificate of Deposit- 1.988%**/ 10 year average
Option #3- Blend of Equities & Fixed Income Mutual Funds- 2.6%***/ 10 year average
As one can see option #1 and #2 are terrible returns on one’s investment. They are garnering less than a 2% return. Option #3 is a sub-par return on and average at best when looked at a 10 year period.
Now let’s look at an individual that has invested in the iShares NASDAQ Biotechnology Index (Ticker- IBB) Fund over a ten year period. Their return over this period would be 306% return.
Investing in the biotech ETF is SMASHING THE BOX! The reason this is SMASHING THE BOX is because the investor is taking chances, allowing themselves to make mistakes and are not controlled by fear.
When one is controlled by fear they construct one of the four walls of the mental box that keep us from reaching our full creative potential. In this case it keeps investors from receiving above average returns on their investments.
I understand individuals and families’ investment risk varies greatly, and for many this is not a suitable investment. However, the point of SMASH THE BOX isn’t to give financial advice or tell people what to invest in, rather, it’s to open their eyes and minds to opportunities they have never thought about before due to being held back by fear.
Many could argue this is a blanket statement for SMASHING THE BOX and for me picking the IBB ETF is very convenient and easy to do due to its performance. The reason I did pick this sector, biotech, is due to the fact that I have invested in it for the past 10 years. I have had successes and failures with my picks.
On my overall stock picks I have had more loses than wins, but on overall profit I am up. I have experienced gains in this sector that were over 200% due to particular bio tech stocks shooting up on a successful phase III trial, FDA approval or encouraging news.
One of my successful picks was a company called Human Genone Sciences (HGSI) where I bought a 1000 share at $2.15. They had a successful phase III result with a drug for Lupus and the stock shot up to $34 a share. I sold the stock and made over $30,000 profit.
One of my worst stock picks was a company called Delcath Systems (DCTH) where I purchased over a 1000 shares at $9.04. They had an unsuccessful Phase III result for a chemotherapy drug system and stock plummeted to under $1 a share. I sold the stock and lost a lot of money.
It’s true to truly SMASH THE BOX one has to take chances and this includes failing. Failure is part of SMASHING THE BOX. I personally have a high threshold for taking risks and for the past 10 years have invested in the biotech sector and experienced incredible gains and losses.
Again, SMASH THE BOX isn’t about investing in this biotech ETF(seek professional financial advice/ remember I am a theater major) it’s a mindset:
• Increasing our risk tolerance
• Allowing ourselves to make mistakes
• Operate in a creative environment