Recruiting vets to trade
The language that corporate America’s chieftains use to talk strategy often resembles that of military commanders discussing battle plans. This should come as no surprise as some of the top performingCEOs served in the U.S. military.
U.S. corporations led by 16 sitting CEOs with military backgrounds in 2015 outperformed the S&P 500 significantly according to data collected by BoardEx, a subsidiary of TheStreet that analyzes corporate relationships. Those firms posted an average gain of 8%, compared with the S&P 500’s decline of 1.2%.
Three CEOs who attended West Point: Alex Gorsky of Johnson & Johnson (JNJ), Steve Smith of tech firm Equinix (EQIX) and Scott Rowe of oil-and-gas supplier Cameron International (CAM), fared even better, with an average return of 36%.
In addition to leadership roles, veterans tend to excel in fast-paced decision-making positions such as trading. That may be why trading has become a growing part of U.S. military culture. Increasingly, active military and veterans are showing strong interest in online trading.
“At TradeStation, we have made it our mission to help active military and veterans access the financial markets with confidence, at as low a cost as possible,” says Travis McGhee, vice president of Business Development at TradeStation, and a Marine Corps veteran himself.
TradeStation has launched a program called TradeStation Salutes, which offers commission-free trading for stocks, ETFs and options, and a waiver of all account inactivity fees and no charge for real-time market data to all U.S. military personnel on active-duty.
But the benefits of military training extend beyond the purely financial. Traders with such training are less likely to be involved in corporate fraud, are usually fiscally conservative and perform better under stress, according to a working paper from the National Bureau of Economic Research.
“The trading world, like the military, also requires one to have a plan, and even more important, to stick with it,” says McGhee. “One may argue that our military, and its training in the ability to remove emotion from decision-making while also reducing risk, finds a welcoming home in the world of trading.”
“Those having served in the military have a background rich in discipline, with detailed training around defining objectives and building a plan to accomplish said objectives,” McGhee says. “This skillset is not lost once you leave the military. It becomes a part of you. I see this first-hand when working with prior military clients during their educational journey in the trading world. “
He says former military personnel treat trading as a craft, not a hobby. “They come into trading with a defined purpose. Whether that purpose is to save for retirement, generate income or simply make money, most are disciplined enough to map out a plan and stick to it, rarely wavering from the path they set out on."
Being able to make immediate assessments of risk and reward is another learned skill that gives veterans and edge. They often have a keen understanding of defining risks, a skill that is paramount when it comes to trading, he says. “The veterans I have helped educate understand there is a process involved to be successful at anything. This understanding allows them to operate in the right mindset, making risk-based decisions.”
TradeStation, part of the Japanese financial services provider and forex brokerage Monex Group — an online broker-dealer and futures commission merchant — predicts that military experience makes for more natural traders.
The TradeStation Salutes program also includes lowest commissions per trade on stock, ETF andoptions commission rate of $4.99 per trade (+$0.30 per options contract), waiver of all inactivity fees and free real-time market data.
The program is available to all active-duty and retired U.S. Army, U.S. Navy, U.S. Marine Corps, U.S. Air Force, U.S. National Guard and U.S. Coast Guard personnel who open a new TradeStation brokerage account.
With this program, TradeStation has teamed up with trading educators across the country to teach on everything from basic financial concepts to advanced trading strategies. Last November, Philip Gaither, a U.S. Navy service veteran, took a seven-day professional trading course at Online Trading Academy (OTA) in his hometown of Overland Park, Kansas.
The trading platform he was introduced to in class was TradeStation. After successfully completing the course, Gaither was informed of the program that he, as a U.S. military veteran, would be interested in. In December 2016, Gaither set up an account and downloaded the TradeStation software.
“Waiving the monthly account service fee has made it possible for me to continue learning the trading platform from home,” says Gaither, who before taking the OTA course was a novice trader who managed a small 401(k) account through an online brokerage firm — occasionally buying and selling a few stocks over the years.
Taking advantage of the simulated training mode, Gaither executes simulated trades in live markets with real market data to test his chart-reading abilities and trading expertise until he can demonstrate consistent positive results.
“I get periodic e-mails from TradeStation and have participated in online webinars and classes,” says Gaither.
“Our objective is to build a bridge between the trading and armed services communities,” TradeStation’s McGhee says. “We want active military and veterans to have the knowledge and tools they can use to help them achieve their goals as self-directed online traders.”
Gaither is semi-retired from the 40-hour-a-week office world. He does consulting work with information technology and engineering companies’ along with his involvement in trading.
Through his military service, Gaither obtained the rank of Petty Officer 2nd Class Fire Control Technician and completed his Navy service on the aircraft carrier FD Roosevelt 42 in 1968. He says he has been blessed with “common sense” that over the years has served him well.
“I trust it will continue to serve me in my future trading,” says Gaither.
“TradeStation is proud to honor the sacrifice of those who defend the freedoms and liberty we as Americans often take for granted,” says John Bartleman, president of TradeStation Group Inc. “This new program is our way of recognizing and giving back to those who proudly serve.”
McGhee adds that they want to reach and help as many veterans as possible to spread the word about the program as far and wide as possible.
TradeStation may extend the program to first responders (fire, police, EMTs) in the future.