The economy and the financial markets are the most difficult and dangerous as I have ever seen in my 27 years in the industry, and overwhelming consensus is that the dismal economy will get even worse. As you can see from the chart below, we are likely only about half way through this bear market. Nevertheless, many people continue to take on far more risk than they need, want, or even are aware of.
However, given today’s uncertain times and low interest rates, what is an investor to do? Neither can you just sit in cash or CD’s awaiting Armageddon and/or close your eyes with a buy-and-hold (buy-and-hope) investment portfolio. Both approaches would prove catastrophic for virtually anybody’s long-term financial plans. Successful investing requires that we take what the market gives us. That means tactically investing in the appropriate assets that take the least amount of risk possible to achieve your goals. That is exactly what my new Strategy is designed to do.
Who the strategy is for:
Moderate growth and income investors looking for reasonable returns. Our goal will be to capture 70-80% of the upside of the financial markets with only 20-30% of the risk. Please note: This program is not for speculative or aggressive growth investors.
What the strategy will do:
This innovative new strategy will combine our Top Down Tactical TDT™ with a protected dividend approach that will capture the dividends and income of high yielding stocks, bonds and preferreds, while hedging the principle against a market decline. What we like to call, “Grabbing nickels and dimes in front of the steamroller.” This is not a generic, one size fits all program. Each portfolio will be tailor made for each individual investor.
What many investors fail to realize is that dividends account for almost 50% of the return of the S&P 500 since 1925 and over 100% for the last decade. The continued economic and financial uncertainty has created tremendous opportunities for moderate growth and income investors, driving dividend yields well above average, as currently there are many high quality issues with yields of 8-10% and higher. This program is designed to build a portfolio of the best high yielding investments. It will then hedge the principle using inverse market funds, which rise in value when the stock market falls. Therefore, we will be hedging or protecting some or all of the portfolio, while collecting the dividends on the investments.