How To Build Wealth Investment U
Post on: 18 Апрель, 2015 No Comment
Achieve Your Financial Goals in the New Millennium Using Our Four Pillars of Wealth
An Investment U White Paper Report
By Alexander Green. Chief Investment Strategist. Investment U
Our philosophy of investing is this: You can’t go too far wrong if you get the big questions right.
The big questions are not when will the economy recover? or where will the market go next? True, these are the questions that most investors obsess over. But it’s a misallocation of your time.
The big question is how to build wealth with a game plan for the long haul and, more specifically, the following points that you can take action on:
Here’s how this philosophy can make this year – and your future ones – very prosperous.
How To Build Wealth Pillar 1: Stick to Our Asset Allocation Model
Successful investing begins by conceding that – to a degree – uncertainty will always be your companion.
You can guess what the market is going to do and be right or you can guess and be wrong. Or you can let some self-styled expert do the guessing for you. But no one guesses right consistently.
That’s why we follow a wealth-building investment formula that won Dr. Harold Markowitz the Nobel Prize in finance in 1990. His paper promising portfolio optimization through means variance analysis demonstrates how to maximize your profits and minimize your risk by properly asset allocating and rebalancing your portfolio.
Diversity Doesn’t Mean 3 Different Tech Stocks
Sometimes our readers tell us: Oh, that means diversify. I already do that. But that’s not what asset allocation is about. Right before the dot.com crash, you could have diversified into Microsoft, Intel, Yahoo and Amazon.com… and gone right off the cliff.
Asset allocation refers to spreading your investments among different asset classes, not just different securities or market sectors. Doing this has allowed us to survive, prosper and build our wealth, even during rough times.
High-grade bonds, real estate investment trusts (REITs), high-yield investments, inflation-adjusted treasuries, precious metals: It’s good to have at least a piece of each.
Because different asset classes are imperfectly correlated – some zig while others zag – our model allows you to boost returns while reducing your portfolio’s volatility.
In layman’s terms, proper asset allocation means you sleep better at night.
The Foundation of Our Philosophy
Asset allocation should be the foundation stone of your whole investment program. It’s critical to building your long-term financial health. To learn more about it, pick up a copy of William Bernstein’s excellent book, The Intelligent Asset Allocator.
How To Build Wealth Pillar 2: Adhere to the Oxford Safety Switch
Anyone can buy a stock or publicly traded fund. The real art of investing is knowing when to sell. Investment U does not rely on point-and-figure charts or tarot cards or Elliott Waves. Instead, we adhere to a time-tested trailing stop strategy. That means no member takes one of our stock recommendations without knowing in advance exactly where we’ll get out.
This takes the guesswork out of investing. And guarantees that both your profits and your principal are always protected. Here’s a quick review.
Let Your Winners Ride
We start all of our trading positions with a recommendation that you place a sell stop 25% below your execution price. As the stock rises, we raise the trailing stop. In other words, if you buy a stock at $20, your stop loss is at $15. When the stock hits $32, your stop loss (still trailing at 25%) will be at $24.
As long as the stock keeps trending up, we’re happy to hang on. If the stock pulls back 25% from it’s closing high, we sell. No questions asked.
And Cut Your Losses Early
