so the question is do zero risk stocks meaning stocks that if the stock market goes down you lose no money but if it goes up you make money do they exist and before you click off this video and say that's too good to be true it's actually not they do exist and in today's video I'm going to explain to you why some of you should use them and others probably don't want to so let's pop over to the screen here and today we're going to talk about the question do stocks with zero risk exist and I'm very excited about this video because a lot of work went into this and a lot of history and back back testing and you guys are going to learn a lot from what I dug up and what I found so yes they do exist but as with anything there's a catch and that's what we're going to talk about in today's video today I will explain what they are and who they might be for lots of research went into this guys so please please please if you have not already consider subscribing below and of course I'll ask you a few different times if you could click the like button for videos that in include a ton of research just like this one and I'm trying to get through it as fast as possible so we get right to the value right to the information no fancy editing so first of all I'm going to answer you the question what is a zero risk stock and how do I find one well a Zer stock might have a couple different names if you go on the internet right now and Google these things the first name you might find is called a buffer ETF the second one you might find and definitely the most popular name that you're going to find is a defined outcome ETF and this is going to act as any other ETF for those of you guys that don't know what an ETF is an exchange traded fund think about it like a basket instead of buying apple or Nvidia or Amazon and only owning one stock you can own an ETF that owns a basket of stocks that has a bunch of stocks inside of it and these ETFs typically and in this case what we're going to talk about today they track the S&P 500 so these buffer and defined outcome ETFs are tracking the S&P 500 to get the results that we're going to talk about today so the goal of them is extremely simple provide downside protection and allow you to participate in the upside so what does this mean they're using a string of option contracts to limit the downside but allow you for upside potential so on those years or maybe those consecutive multiple years that the market drops and drops and drops you don't have to lose any money but on those years like we've had recently where the Market's on skyrocketing and it's like on a rocket ship with rocket fuel you make some money to the upside but not all of it and so that's what we're going to talk about we're going to weigh these things today as pros and cons and certain parts of you some of you listening to this message are going to be able to use this to your advantage others I don't think you should use it and I'll explain the difference between the two and if you stay until the end I'll not only show you the last 10 years but I'll show you all the way back to 1926 and the results of these things so they do this by giving you what's called protection and a cap level remember those two things I want you to write this down in your notepad protection then the other one I want you to write down is Cap level so what is this well oops protection is how much downside do they protect against what do they actually protect against meaning what is the percentage of downside they protect against cap is what do they limit your upside to meaning once you hit that cap you no longer make any money so with that said if you have 100% protection buffer it is protected 100% to the downside your only fees are the expense ratio which you have to pay with every ETF for them to manage the ETF for you which will of course calculate that out in just a little bit and show you what the expense ratio is if you have a 15% protection buffer it is protected 15% to the downside so as an example of this if the market drops 20% in the year you only lose 5% you don't lose all 20% because the 15% buffer sits there the first 15% downside you are protected from just like in this example all 100% which by the way we're going to show you both of these examples in real time today but in this case all of the 100% is protected so if the market dropped 90% you lose zero if the market drops 10% you lose zero aside from the expense ratio okay if your cap is 8% that is the max you can earn in one year so if the S&P 500 goes up 25% you still only earn eight so now you can see there's some pros and cons building here so the question is should I invest in a buffer ETF or should I just stick to the Spy that is the premise of this entire video and so first what we're going to do is we're going to talk about the the past 10 years 2013 to 2023 it involved covid it involved downturns upswings you name it and then if you stay till the end of the video we're going to discuss from 1926 to 2024 or 2023 excuse me which is almost 100 Years of data so let's dig into this so I went digging for some of the largest buffer ETFs and here's some of the ones that I found and by largest I mean assets under management the market cap number one the colos S&P 500 structure alt protection ETF now what's unique about these ETFs is they actually date all of them different dates so you'll notice August July June sort of ignore that but remember the ticker symbols change and in order to get the full prote protction you must stay in these ETFs for a full year so keep that in the back of your head as well so what's the cap on this ETF it's 8.74% meaning if the market goes up 15% the most I can make is 8.74% my protection 100% I can't lose there is no downside so I have 8.74 upside I have 100% downside the only thing I have at risk on a downside year is 69% of my portfolio's holding in this specific ticket and so what does that mean if I have $100,000 in this ticker I have to pay $690 which is 69 $690 per year to have this ETF in my portfolio so this was the first one that I found the second one I found was from Black Rock it was called the ey shares large cap Max buffer ETF it had a cap of 10.64% so a higher cap a higher protection or excuse me the same protection but what I mean by a high protection is expense ratio was actually lower notice this one's at 69 so this one's got a higher cap same protection better expense ratio so instead of paying $690 on 100 Grand this one you're only paying $500 on 100 Grand it's better in every way this one is again the Black Rock ey shares large cap Max buffer ETF the last one I found was super interesting it's got a higher cap 16.9% protection 8.23 3% expense ratio is higher than both 85% now at face value you might discount this one because of this protection but news flash I've got something to show you in a little bit or this one might be the better option for you so let's continue so if we historically track the market following these protections and caps what was the result I'm sure you all want to know what do they have to do compare to each other so let's jump into this this is comparing the calamos with the ey shares from Black Rock with the fjw the last one we just talked about and you can see the one that had the lowest buffer protection which was the third one is in yellow the uh the middle one the black rock one is in red and the first one I showed you is in blue which one had the better results you can all see it everybody can see this on the screen the yellow one so it's actually the one that didn't have 100% downside protection but allowed you for larger gains that ended up giving you a better result from 2020 uh 2013 to 2023 and you can see the result there however when you look at the dollar value you'll notice it's a bigger result than you probably guessed look at that calamos at the end of year one starting with 50 Grand invested was 53,9 N4 by the end it was 91707 the second one from Black Rock ended at 107 the third one ended at 1 134 we're talking a difference of 91 to 134 almost 40 about $45,000 difference from the calamos the first one we talked about to the third one we talked about but the important question now is how does this compare to spy to the S&P 500 because what a lot of people want to know is does this outperform the Spy especially if you guys are risk on you're not risk adverse let's see it's not even close not even in the same hemisphere the blue is the Spy if you had just invested in the Spy the blue is rocking to The Upside now this is interesting guys because the reason so many people are excited about me explaining this video is I found a study that showed that people are two times more afraid of losing than enjoying the joyment of winning Point made people would rather avoid losing and take a risk of not losing they would rather avoid that loss than the gain but the S&P has shown you there's times of downturn and of downturn and those times of downturn most people just can't stomach but if you could stomach it the Spy has outperformed all of this time so you'll notice the green one doesn't have unlimited downside protection so it goes down just not as sharply and it goes up just not as sharply because it has limited cap app as well as the yellow of course which is the secondary option has no downside because it's only the expense ratio so you can see it just keeps going up up up up up up up and doesn't even pull back right here so while everybody else in 2022 is losing money you weren't but it doesn't go up as fast because you're limiting your upside to just above 10% this is important to know because it depends on who's listening to this message I'll talk about the difference in just a little bit so take a look at this we're talking about over $100,000 difference with the Spy if all of us started at the beginning of 202 uh 2013 with 50,000 bucks by the end of 2013 I'd have 66 here 53 here 55 here 57 here but by the end of those 10 years 202 compared to 134 107 and 91 it's not even close for people that are willing to risk and they they have that investment in that time Horizon to risk long term you shouldn't consider one of these quote unquote risk-free ETFs so now I ask you the question is it truly risk-free if you're basic Ally risking an additional $100,000 as you can see here by not investing in the Spy I guess it's an interesting perception to think about so this is only for 10 years and I told you if you waited till the end of this video we could look further back so what happens if we look further back than 10 years now a disclaimer here buffer stocks didn't exist years ago neither did the Spy but we followed the identical rules to get the most accurate test via the SPX and of course we still followed the the same exact buffer and protection rules to give us the most accurate test on what would have happened with $50,000 invested at the beginning of the market in 1926 oh my goodness do you guys see the difference it is not in the same Planet it's not in the same galaxy the Spy has worked its way up into a different orbit where these three are way down here so what do those numbers boil up and look like well almost 800 in this case and you can look at the comma what is that that's $50,000 to almost a billion versus right down in here I'll give you guys an example of what this is we're talking about 15 million 20 million in that hemisphere we're not in the same realm and so for people that are so risk adverse this is the price you pay by not being invested in the S&P 500 so I think this is a great strategy but certainly it's not for everybody and so now what I want to do is talk about perceptions of who it might be for and who maybe it's not for so this is not for a young investor like myself who can take risk certainly this is not for someone who wants aggressive growth and has a long time Horizon for that growth they have 20 30 40 50 years but this is perfect for a bond replacement strategy if you guys have some of your money in bonds but you still want exposure to the stock market this limits that downside exposure but allows you some of the upside potential this is perfect for the risk adverse people that just don't like Risk they would rather just not lose they want to keep their balance up they don't want to lose money and they want to make a little money long term this is perfect for those sort of people this is also perfect for someone that's close to retirement that no longer wants to risk of a potential downside in the market like we know potentially could come or somebody that's in a retirement stage they're already retired and they still want their money working for them they don't want it fully in bonds they still want some of the upside potential of stock market but they don't want to risk losing money because they don't know when the market would return to normal that's perfect for them so my question for you guys now is what do you guys think overall just general thoughts what do you guys think of this strategy do you think it's going to be something that's for you do you think it's something for your parents do you think it's something you're going to share with people what do you think about this strategy before you go I really want to know if you think if this is for you or not comment below this is for me and these are the reasons why this is not for me and these are the reasons why now granted for those of you guys that are wondering okay how do I expose myself to this remember you can look up the titles of those that we already talked about in the past and you can find their ticker symbols and you can go to your your your trading broker wherever you trade and it's no different than typing in apple it'll pull up just as a ticker you can look on that you can decide if it's for you and you can click that button to purchase some shares so lastly what I want you to do is click that like button to let me know that you want more videos just like this on this channel where we go in- depth we look at some studies I don't waste anybody's time no fake stuff just all of the facts and I'll let you decide if it's for you or not finally I want you to go check out this recent video it's my my video on survival the next recession I'll see you guys excuse me on the next video by