A Note To My Friends
T*psterisms are: Meaningful teachings that the T*pster loves passing on to all his friends, old and new. Nothing more, nothing less, just lessons already learned by trial and error. Hopefully helping to make things a little easier and a bit more fulfilling.
A Pyramid Approach
All successful investing starts by admitting that uncertainty will always be a part of the equation. Hence, there is no perfect strategy. However, there certainly is a strategy to employ when it comes to dealing with your new found friend, uncertainty.
The fact is, your strategy may change as your needs change or as father time changes your tolerance for risk. This is where I believe your pyramid begins to define your strategy. Through your past, to the present and into your future.
Building your pyramid
If you take your life and all its holdings and list them out on a piece of paper starting at the bottom of the page with the most abundant things you possess (like food, clothes, books, etc., etc.) working your way up the page to more valuable but limited possessions (like jewelry,vehicles, keepsakes, etc.) all the way to the very top which would hold just your most valuable possession like a house or possibly more……
Near, or at the top of this pyramid will also be your esteem or profession. You may value yourself at the top of your pyramid and there is no reason that shouldn’t be. This is to say that without you all the rest of the blocks in your pyramid would be unstable and in danger of collapsing.
The key to this exercise of building your pyramid should now come into focus. We can’t get to the top without building a strong foundation. Stay with this principle and investing can be easier than you ever thought possible. It all starts with a strong foundation!
Keys to Success
There are really just “Five Keys” to what I describe to be a winning Investment Strategy.
1) Having the means to begin investing
2) Learning how to yield the highest return with the lowest amount of risk
3) Finding the best research online today
4) Protecting your profits
5) Cutting your losses
Diversification
Until you have properly put together a diversified long-term portfolio you cannot implement my speculative short-term approach to wealth building. This can be done through a 401K at your place of employment or by building your own IRA’s with help from the likes of Fidelity Investments or various other investment firms. Do not go this alone; and, heed my warning that all that glitters is not gold.
This long-term “Core” portfolio must focus on diversification of assets. So, this doesn’t mean three or four of your favorite tech stocks! Asset allocation means spreading your holdings across various asset classes. Some stocks, both small and large cap, some bonds, both long and short term, and various mutual funds both domestic and foreign.
Your very unique asset allocation allows you to boost returns while limiting your volatility. Most often, the more diverse your allocation is the safer and consistent your returns. In other words, the more diverse the easier you feel about it.
It’s all connected
Just remember, your past, present and future are all connected. This past year the pandemic gave us eerie insights to a world of changes and uncertainties. More importantly, those who would forget the past are doomed to repeat it! But, those that embrace and clearly define the past can benefit from it, and garner all they can from it because, it led us to where we are today.
Remember, we came into 2020 riding on the waves of a strong economy and a raging “bull” market. 2019 posted whopping returns in the Dow Jones Industrial Average, S&P 500 and the Nasdaq Composite. Equities were at all-time highs in February 2020 to no one’s surprise.
Then suddenly the corona virus pandemic hit and with all the might of an out of control tsunami. But, investors seemed to hit back even harder. It was quite surreal and almost mind boggling.
What continued through the spring and into the summer, with brief and minor adjustments in September and October was encouraging and incredibly heroic in its own right. Quite possibly the greatest lesson I have ever witnessed in all the years of my investing. That is why we must remember 2020.
First and foremost, the Federal Reserve came to the rescue. The opening of the purse strings so to speak. Sending massive amounts of stimulus checks, additional unemployment compensation and small business loans with incredible income forgiveness out to frightened and desperate Americans. These Americans, some stuck at home, others isolated and looking for an answer to their dilemma decided that this money wasn’t enough to make a significant difference. Consequently, many took the funds and reinvested this money. This was extremely true of younger Americans that took those stimulus checks and decided to bet on the future. Young first time investors opened millions of new brokerage accounts and poured millions of dollars into the market.
Retail investors, instead of selling out, helped launch a bull market by buying with their free trading apps all through the February and March plunge. Institutional investors then followed that lead and backstopped each upward thrust, chasing those same stocks and generating tremendous momentum. This, of course, invigorated retail investors even further.
Even though most of the “value” stocks being scoffed up didn’t have great earnings they were now cheap and first time investors were ready to leap. “Cyclicals” were next and at prices that many investors were looking for. Finally, institutional investors had to buy everything the retail investors had bid up so they didn’t look foolish and left behind.
At the end of 2020, set up by the Feds, many new retail investors rushed to build a stock portfolio and good old American optimism ruled the Market.
This is where we are
This can be a starting place as good as any heading into a new year with a pretty solid foundation under our feet. The equity markets are not to be feared. While some valuations may be getting a bit stretched, others are still ripe for the choosing. The pursuit of meaningful wealth can and should be one of your goals for 2021.
Why might this be the year to invest? Will things really ever be perfect? Not likely, and that’s because uncertainty is always a given. Yes, some valuations are getting stretched, but that might lead to another correction like we saw last February and March. Any good dip in the markets will trigger another solid opportunity to jump in. And, as vaccine distribution and the coping with covid-19 gets significantly better the economy will follow suit with a slow but steady recovery.
Where we want to be
I’m delighted you have made this decision to join me in a pursuit of meaningful wealth in 2021. Where we go can be down different roads, but the main highway will lead us to our destination.
Many promising paths
The travel industry could be set to explode this year. After a beating down in 2020 those companies that have managed not to buckle under will have the wind in their sails sooner than we might even expect. Most of the companies that remain, allowed customers to postpone and reschedule as travel bans and lockdowns get lifted. This means that there will be a backlog of bookings just waiting to happen. Furthermore, on top of the old bookings to be filled many millions of us are going to book new travel plans as our escape from the year of seclusion we’ve been subjected to.
Prior to the global lockdowns international tourism was up over 10% from the previous year, which translated to nearly $9 trillion. After covid that number plunged by 80%!
I believe there will be so much demand for travel, whether for work, vacations or just to get away for a while. Consequently, the rebound in global tourism should be enormous. This leads to other company booms such as hotel and lodging, car rentals, travel agencies and ticket sales industries.
Could Expedia Group, Inc. (Nasdaq – EXPE) or, perhaps Airbnb Inc. (Nasdaq – ABNB) be poised for the bulk of this travel activity to come? This investor believes so.
Others claim with Biden now in the Whitehouse and a very progressive congress at his disposal, clean energy companies are worth investing in right now. Mike Porter, a founding partner of Stansberry Research, Inc can educate you on what he thinks can be the number 1 move financially in 2021. Go to: (stansberry.go2cloud.org) to hear this powerful man who does not mince words and doesn’t aim to be politically correct.
Help along the way
I personally use Fidelity Investment Research, The Oxford Communique with Alexander Green, The Money Map Reports and Money Morning Reports from the Money Map Press.
I recommend the book, “Beyond Wealth” by Alexander Green, a chief investment strategist. And, I wholeheartedly suggest joining the Oxford Club at: (www.oxfordclub.com/contact-us) or call (800)992-0205.
My success
Most of you who know me now know that I made my biggest reward when I invested in Tesla three years ago. It seems General Motors is to begin making electric cars to compete with Tesla. Tesla stock is off the charts and continues to rise against all odds kind of like a magical mythology tale. GM has had a very nice run since November 2020. Ford and Volkswagon are about to unveil tremendous new electric vehicles which should give them a large boost in the market as well.
What I see down the road is the development of the “Quantum Glass Battery”. Already in existence and being massed produced as you read this. I’m not ready to leap, but instead have just sent for a copy of Matt McCall’s “The Secret Battery”. Until I research this further, I will hold off on any recommendations except, that I believe you too should send for this book.
Investment Clubs
Joining investment clubs is sound advice and fully recommended. Most older clubs are worth their advice in gold. They are designed to help increase and protect the wealth of their members.
Make your New Year’s Resolution to join at least one and dominate the markets with explosive profit opportunities.
In Conclusion
Warren Buffett, commonly referred to as the “Oracle of Omaha” and renowned investment genius, has amassed his fortune by using a simple strategy. He only buys stocks that exhibit these fundamentals: 1) strong earnings power 2) continued growth 3) industry leaders or the potential to be so. Furthermore, he only buys these companies when their stocks are trading at a discount to their intrinsic values.
This is why the information that is readily available is critical to your success. Do the research and reap the rewards. You can never have enough information so just keep reading and learning.
Joyful, steady and prosperous investing is my wish for you all. T*pster smiling at yas…………..
