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Dear Investor,
The action here on my personal blog has been hot and heavy over the past couple of weeks — and a fascinating, potentially very profitable theme is emerging …
A couple of weeks ago, I asked you two simple questions:
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Question #2: How do you know how much of your money to invest in each area?
The answers our readers posted here revealed a serious and potentially dangerous problem: The #1 answer — by far — was that too many of our readers make these critical decisions on little more than a “gut feeling!”
Then, last Wednesday, I asked you a third critical question:
How do you think Wall Street professionals — mutual fund money managers and brokers — make these all-important decisions?
The answers came fast and furiously …
Lincoln R. hit the nail squarely on the head: “While the fund managers and brokers (in theory) have research analysts to pull apart a company’s reported information and gain insight to given industry groups,” he says, “when it comes down to it, they too are acting on ‘gut’ to make their calls.”
Ron R. agreed: “I think the professionals are hearing what others are saying and then using their ‘gut’ to sway their decisions in what they believe is the best direction.”
Dave D. has no illusions either, writing, “They have no more idea than the rest of us. They simply go with the herd. Their funds rise and fall in value along with the underlying assets.”
Joe A. is convinced that the Wall Streeters are clueless: “I don’t think the professionals on Wall Street have a clue,” he writes. “I think they spread their investment capital over several hundred investments so that no one decision will torpedo their portfolio.”
And Jeffrey’s answer got everybody smiling: “Considering the track record of fund managers,” says Jeffrey, “I think there is a lot of shooting from the hip and monkeys throwing darts.”
Any way you look at it, this
is a serious state of affairs!
If your portfolio is NOT intelligently invested in the asset classes (stocks, bonds, natural resources, currencies) that are most likely to rise in the months ahead …
And if it isn’t prudently balanced to give you greater exposure to the most promising investments and less exposure to those with far less profit potential …
Not only are you likely to miss out on the most profitable investments going forward — you’re also likely to get nicked for painful losses!
It’s clear to me that we have unearthed a critical need here. Our readers — your fellow investors desperately need a practical, time-honored strategy for building a balanced portfolio. And it must be based on FACT — not fiction — in order to tell investors WHEN and HOW MUCH to invest in each asset class.
So today, I’m asking you to help us help you once again: Click here and post a comment to give me your answer to this all-important question:
If you were asked to create the ideal strategy for building, diversifying and balancing a growth-oriented portfolio, where would you begin?
What reliable scientific tools would you use to identify the most profitable asset classes moving forward?
How might you decide how much money to invest in each?
And how would you know when it was time to CHANGE your portfolio structure to avoid danger or to harness emerging new profit opportunities?
Over the next few days, I’ll also be on my blog to give you my personal feedback.
Good luck and God bless!
Martin
P.S. Due to overwhelming response here on my blog, I cannot personally respond to each and every one of your comments. However, I’ve recruited two of our best analysts, Amber Dakar and Mandeep Singh Rai, to help me reply to your postings.
{ 254 comments… read them below or add one }
If you wanted to put money in an absolutely safe investment what would it be ? Also where would it physically be? US Switzerland China Belize ?
So far–every so called professional advisor that I have had the misfortune to use- has sold my decent investments and bought others that have headed south. I won’t pay a fee to another advisor to invest my hard earned money in losers. I sometimes think they are receiving commissions from the companies where they invest my funds,
The scientific method used is “the scientific method” Identify the problem, brainstorm solutions, pick the best solution(s), monitor the results
Applied to investing the problem is simply how to NOT LOSE money. Since any asset class is dependent on the “market” which varies – a knowledgeable diversification among asset classes and a close monitoring system are key fundamentals
The other keys are patience and an ability to see the forest through the trees – including the dart throwing monkeys
Paul
I have bought your investment advise so that hopefully you can inform me on what, when and where to buy. I am new at this but have seen so-called experts be totally wrong. I have watched what your analysts have been advising and have just recently started to invest. I am taking it slow because there have been some you haven’t been too accurate on……….but I can’t buy everything that is suggested so I am at your mercy. I would like to know what Gold stocks you are suggesting now.
follow trends and get cautious when they show signs of changing
I may not be smart and my aim is survival, not profit. I have no conficence in bubblegum economies
My plan is to reduce significantly exposure to N.American equities from now through October and put the funds into cash / CDs at a good bank. This will amount to about 50% of current long term savings.
35% will stay in solid offshore investments including companies like Braskem that are cash-rich and fiscally conservative – and poised to become a global player.
The balance in metals.
After maintaining a matrix &/or curve of performance, Wall St. will only allow so much grow/appreciation in a given period before they step in to get their own payday; a fact. To alieviate such pitfalls, avoid the glamour stocks/mutuals & the promised high yields as these are the first Big Money/Wall St. hits. Avoid junk bonds & mutuals that Big Banking has rolled their ultra-high risk ventures into to maintain their win-win situation.
After the big plunder by Big Money/Wall St. in late 2008 & 2009, limit your investment exposure & stay with basic needs of life.
Martin Weiss Reply:
January 27th, 2010 at 12:14 PM
Art, you’re on the right track about Wall Street, but I think it would be helpful for you — and other blog visitors — to understand a bit more specifically what mechanisms Wall Street uses to achieve its payday at the expense of average investors:
Mechanism #1. Proprietary trading. The ADVERTISED role of investment banks and brokerage firms is to help YOU make money in YOUR portfolio. However, their primary source of profits has been from their own trading accounts. This DUAL role immediately raises a whole panoply of conflicts of interest. And these conflicts are, in some respects, reminiscent of the insider trading violations that folks go to jail for. For example: If you’re running Goldman Sachs’ proprietary trading, can you buy investments for the bank that you later tell clients to buy? Worse, can you trade directly AGAINST your clients? Recently disclosed documents indicate that the answer is “yes.”
Mechanism #2. Dumping “inventory.” The firm buys shares for its own account in a company that its research team wants to downgrade from a “buy” to a “hold” … or from a “hold” to a “sell.” The firm delays publication of the downgrade, while holding a Squawk box session for brokers and customer reps to pitch the stock to retail clients. This gives the firm an opportunity to dump their inventory in the stock before the downgrade is released.
Mechanism #3. High-risk products. Major Wall Street firms develop high-risk, high-fee products based on mortgages, and then proceed to market them aggressively to individuals and institutions around the world, presenting them as low-risk — even guaranteed — high-yield investments. Months later, based on new data, the firms’ executives reach the conclusion that the mortgages are questionable and the products are actually very high risk. However, since sales are still good and since the firms’ decisions are still driven by earlier revenue goals, they give instructions to sales departments to push forward with little or no changes in marketing language and no additional risk disclosures.
Mechanism #4. Using government guaranteed funding to pursue these activities.
Mechanism #5. Full-court-press lobbying efforts to block any changes that might alter their game … or worse, to conveniently CHANGE the rules of the game in their favor.
These are just a few of the examples that have been disclosed so far. But, alas, it’s just the tip of the iceberg. — Martin
I’d get on my knees and ask my God for guidance.
Christians are doing more of that these troubling days.
To build and manage a portfolio start with what is happening at your comapny. Are they outsourcing, growing, changing focus? This can provide clues to areas to investigate. Go to the supermarket and see what is moving through the check out. Just look around and and see if there are areas to avoid as well as those to commit resources to. Don’t invest in anything you can’t follow.
Martin Weiss Reply:
January 27th, 2010 at 12:16 PM
Jim, this is great advice! I’m sure you don’t see it as the ONLY way to invest. But it certainly can help if you have a direct, personal understanding of the product and the people who make it. One word of warning (even though I doubt that’s what you meant): Be careful not to take advantage of information about your company that other investors might not be privy to. It’s not only unfair. It’s against the law. — Martin
If I had half a million dollars to invest – I would invest in a farm and hire some men to help me work it… With war in the clouds of political disruption – Invest in myself…
Be well and God Bless…
Thomas
author – “Chronicles of a Prophet”
All the metrics and studies, and research are useless in the presence of
market manipulation. Are you seriously going to argue that gold and other precious metals, which would be the logical safe haven, are not heavily manipulated? There can be no logical approach to sucessful investing when manipulation is present, any success is pure luck on being on the right side of the wave. Let’s not kidd ourselves!
Diversification is paramount!
Bonds, or fixed-income equivalents, should be a percentage of your portfolio equal to your age.
Inflation hedge is imperative to safeguard purchasing power. Precious metals are integral.
Dividends “RULE!” Total return on investments is imperative.
Twenty to twenty-five percent of any portfolio should be invested outside of the U.S. stock market if only to benefit from global economic activity.
The correlation of asset classes over time is important but I believe that most of the available data on this fails in a couple regards. First there has been a failure to retain asset classes in the mix that didn’t fit in with the mutual fund industry, ie gold, currencies, etc. Second I am convinced that the long term average of asset class correlation fails to represent the current correlationships wherein so many of the asset classes used since about 1995 have been moving in sinc with each other, contrary to what those long term correlations suggest they should be doing. Most of the available data rely on stats which suggest the market always goes up in the long term but fails to acknowledge the cyclical nature of the market and the fact that sometimes the downturns last much longer than many investors can tolerate; which I believe is the case these days.
I am a real estate investor. I have learned how to analyze commercial properties and local markets in order to get into a position which creates cash flow and an increase of equity. I look at the numbers first and foremost, as well as what I can do to add value to the properties. I believe this must be necessary to do in stocks, bonds, currencies, and natural resources as well- but I really have no idea how to do it! This is why I watch what you guys do- you look at trending and cycles the same way I do in real estate- which is absolutely crucial…it is almost more important when to buy rather than what to buy.
YES….you have really hit my major problem. What to invest in and when to invest are two major problems. Plus, there is very little confidence in the publice sector for stock
investment companies. I am not too much concerned about amassing more money, but
I do want to retain what I have at this point. I guess I have lost faith in the system because of too many “gut” feelings from investment experts. I really enjoy your
articles and trust your opinion more than any other expert. Thanks. Sylvia
I think it important to evaluate if a company is diversified
to prevent collapse in the event of a segment of the market fails.
Maqagement, management, management. A well managed business won’t fail.
For me the most important first thing to do is decide what level of risk I can tolerate. This requires me to control losses while stepping forward wherever possible to increase my portfolio. I don’t believe there is a magic percentage for everyone to keep in cash or liquid items.
I choose to not risk at a level that could hurt my opportunities to go forward even in the face of some losses. Therefore, I won’t risk more than 2-5% of my portfolio on any one project to increase my wealth. Secondly, I only enter activities that allow me to control my risk strictly with stops appropriate to the investment vehicle. Therefore, I have taken complete control away from those who I used to allow to control my portfolio. I am active almost every day evaluating my steps forward.
I think it’s important to invest in Foreign ETF’s, precious metals and mining, along with energy & natural resources. Stick with the trend, but most of all, use a stop loss, to avoid punishment should the bottom fall out of everything. Question is , what do you feel is a safe stop loss position in this economy ?
Thank You Jim Mace
I would wait for instructions from you!
I have no scientific tools, you do.
Only what I have decided I have already lost. In the past I called it mad money and ran it through my spleen. But then I quit drinking and gamble it with your advice instead!
Safe money alerts. .
May God bless you too Martin !
By the way my family makes It’s way thru this world growing food. STAY AWAY FROM AG, Martin and Larry!
I prefere to invest in DOW 30 either tech or finincial or Alcova AA. No foreign investment.
Vijay
Iam re-reading your books and trying to understand more of the market activites. In past been faith ful to investing mainly in US. Present political climate of shooting from the hip and impacting the business climate I am interested in investments in Canada and Australia. Grew up in the Silver Valley of Idaho, so am familiar with environmental restraints of mining metals. Current unkowns of tax consequences only adds to the desires to sit it out until there is more certainty of the bottom line. Not what you make its what you keep! Retired so do not have the years to come back after another down market.
Inflation! We have a nest egg that could
disappear with inflation. We need hedges.
It would be easier if you repeated the four questions here and we simply wrote our answer under each question.
I change my allocation based on technical market trends, and “expert” advice (Weiss, Leeb, Stack, others). But, Its still a gut feel. Right now, I am mostly in cash, and 20% in gold & silver. I Sold energy stocks earlier. I noticed that foreign stocks/ETFs (BRIC) have been mostly following the US market. Why? Maybe because of the dollar? No fixed allocation seems to work in all markets. Your advice is desired.
1. Right now it would be next to impossible to create the ideal strategy for building, diversifying and balancing a growth-oriented portfolio, by reinstating the Glass-Steigall act is where I would begin and rescind the Graham, commodity Futures Modernization Act, right now it’s a gambling casino and we know who wins there.
2. Once again science or predictors are not relevant now, until regulations are reestablished.
3. I invest in dividend producing stocks with low PE’s and are essential to the economies of the world. Shipping and distribution of natural resources.
4. When the major casinos start to take bites of my position, I take a 15% gain and then move on!
I am 72 year old full-time professor. These are economically dangerous times. Even economists are not sure about anything. Wall street has become a CASINO. Our government has turned into a puppet of the RICH by the RICH for the RICH. Even the supreme court is divided in the middle. I belong to the debt-free working class and I listen to the good advice given by Martin Wise and his team. The proportions of investment I use are: 50% in US treasury bills or equivalent for emergencies and 50% in what commonsense tells us as good dividend-yielding companies in a diversified manner. My investment-strategy is to invest my small savings in carefully chosen ETF’s recommended by his team.
I personnal read charts and use timing equations, also watch financial news each day to be plugged into the feel of the market. I have been doing this off/on for a long time. I have been mildly successful at it. The Pro’s also know the charts and the market equations. The 500 lb Gorilla is the Gov’t, He is the Joker and can turn the market on a dime!!!! As has just happened again.
First, we need to identify the major trend in our stock market. Every other decision will be spun off of that one. In my experience, a sharp decline in the DJIA signals declines in gold and energy; and likely signals another flight to quality in treasuries moving bond prices upward. Foreign stocks will also take a hit when our market is down…but will suffer less and recover faster as we witness the mega-trend shift of financial power to the east.
The answer is really quite easy: Ask M,D,WEISS to guide me ! But alas, I can not afford that kind of help,
DAVE NAPIER
Ever time that IDIOt in the White House goes on TV my Portfolio goes through the floor.
Can’t somebody do something with him.
As Soros and Buffet have been able to return over 20+ years 20-25% annual returns, they seek a strong stock, sector, and CANSLIM (O’Neill), and test the market by buying a small position, and if the market is against them, preserve capital and sell, if with them, enlarge the position quickly and large. Diversity not being their high criteria.
We are 50-55, and have PIMCO Bonds (TIPS) for 20%. We are cash 80% currently and seeking to use ETFs these next years using weekly charts with the computer formula Current Price > Previous week’s High plus 5 cents on higher volume.
We have shaved the ETFs down to S&P 500, Russell 2000, and Dollars vs World currencies. In addition, we are adding the Permanent portfolio for 20% of our portfolio (balanced gold, swiss franc, Treasuries) for long term appreciation. I attempt to keep 20% bonds, 20% metals, and 60% flexible in stocks (Some Brazil exposure).
Dear Martin,
Anyone invested long in the US Stock Markets right now is looney.
Allen Fischer CPA
i DO NOT KNOW THE ANSWERS TO YOUR QUESTIONS. iF I tried to answer it would be idle speculation. That is wy I read your comments…..and take them to heart. GJ Tabor
I read alot of newsletters with people who feel as I do about the countries direction.
Then I lok for a concensus of opions .
I then go to my instict having been in this field for over 35 years and voila I go.
my answer is: energy, only energy
my indicators are: production of kWh and sulfuric acid
when is time to change ? when I’ll find better indicators
Sincerely, Gerald
Being a mathematician, I’d first want as much long-term data related to and among all the various economic and financial indicators. I’d want info that describes past, current, and anticipated future economic and market dynamics that could be used to model the interrelationsips among all the indicators, including cycles of activity. I’d spread investment proportionally to represent each sector’s (and specific item’s) relative weight within the current and anticipated financial mosaic and according to the position within each’s cycle. I’d want to keep re-examining the model (at least monthly and weekly near change points) and make any necessary adjustments to reflect the changes. Cash available (at least 10%) would depend upon where sectors and items are within their cycles. If I had the necessary programming tools, I’d use mulit-dimensional computer programming to forecast specific targets. Because I don’t have such tools, I look to your forecasts and cycling models.
Follow the malinvestment of the goverment and invest accordingly.e.g, Banks, motor companys, money supply, etc.
I would appear to me that the bond market will tell us when to get into the market. The bond trade is suggesting that the interest rate should be increased. Our foreign friends & the bond holders could stop purchasing the govt debt one of these days, if we continue to print. Maybe Ron Pauls new bill to do away with the unconstitutional Fed will Pass??? Maybe money will be returned to the congress to coin???
Just hope we don’t have a inflation like Germany in late 20’s & early 30.s. So goes life. Anyway to answer your question 5 to 35% of your investment capital in Gold & Gold Stock andc 50% of your invest Cap in Cash. 15% of your invest capital in Gold ETF’s. Better to be careful with your investments than loose money. If this market is a bear mkt ralley it can turn on a dime.
Best Regards to you and your staff – J
Iwould be sure in addition to relying on good research to also give weighting to the flow and direction of media and human perception. this seems to sway opinion and action–at least in the shortterm.
The reason I subscribed to the Weiss Million Dollar Portfolio was because I don’t know enough about the stock market or investing in general. I have taken advantage of the recommendations for the past 6 months and so far I am down over 5% plus the $3500 subscription rate. Numerous emails are sent from Weiss-related sources extolling the huge profits that would have been made had my money been invested in X, Y, or Z stocks in days, weeks, etc. Unfortunately, those recommendations were not given by your group, so I’m still in the hole. I realize the idea is to look at the longer picture, but so far, I’ve been extremely disappointed in the results from your recommendations
MARTIN, I ENJOY YOUR AND YOUR ASSOCIATES ANALYSIS OF THE MARKET AND OF THE GOVERNMENTS MEDDLING. I AGREE THAT WE ARE IN A VERY BIG MESS AND WILL NOT GET OUT OF IT FOR A WHILE. HOWEVER, I HAVE CONFIDENCE IN THE AMERICAN CAPITALISTIC SYSTEM AND BELIEVE WE WILL IN TIME EMERGE STRONGER FROM THIS MESS.
AS FOR MY PORTFOLIO BUILDING, I USE NILUS MATTIVE’S RECCOMMENDATIONS AND FOLLOW HIS LEADS. I AM A VERY SMALL INVESTOR AND CANNOT PUT A LOT OF MONEY IN THE POT BUT I ENJOY WATCHING THE POT GROW BY FOLLOWING HIS ADVICE. GIVE HIM MY REGARDS. THANKS. JACK
My investment strategy has been pretty simple. It is also constrained by a couple of things that I think is pretty common with the average investor.
First off, I work for a living so I don’t have the time to do the research that would be needed for me to commit a large sum of money with confidence in any investment.
Secondly, I don’t have a lot of money to invest anyway because there is not much at all left over after all the bills are paid.
One bit of advice I have tried to live by comes from a friend who invests in rare coins. He says, Buy the book before you buy the coin. In other words invest in some quality information about your investment before making the investment. If I did have a bit more cash available I would go ahead and subscribe to some investment advisors I have grown to trust over the years but if I did that now with the cost of these subscriptions I would not have any thing left to invest with. In fact I would owe the credit card companies I used to pay for the subscriptions because investment advice is like serious medical advice. It pays to get second and third opinions, and so I would want to subscribe to at least 5 newsletters. I get around this in some ways by checking out the Stock Gumshoe, a free newsletter that reads all the other newsletter teasers ads and figures out what investments they are teasing.
So this brings me to my actual strategy which I developed after pondering these limitations for a few years.
1. Take all the free advice you can get by signing up for free information via email from advisors you trust.
2. Watch what the big governments are doing, USA, UK, China, EU. Their decisions, right or wrong, can effect the market in big ways and help identify sectors that will be winners.
3. Don’t invest any more than you can afford to lose should your wisdom be off and the investment tanks anyway.
4. When making the actual investment, give the most weight to 2 factors. Underlying value of the company. and P/E ratio. This is probably the most important one. I.E. When putting money on the line, try to buy nickles with pennies and quarters with dimes. And don’t buy any investment that shows by it’s P/E ratio that it would take more than 15 years of growth to recoup the share price.
Not really sure how to build a primarily growth only portfolio.Since I am 76 and very interested in higher yield stocks I read what you and Navellier have to say about growth and add them into my overall portfolio which is fairly full of 3-9% yielding stocks such as Kinder Morgan Energy,Enterprise Products,Cellcom Israel, etc.Please enlighten me further.
Martin,
I don’t pretend to know how to invest in the market. That’s why I listen so carefully to what you and your analysts have to say about things that matter. I’m not using my gut, I am trying to use your experience until I can gain some of my own. I am a new investor. I don’t have tons of money and I don’t want to let what little I have sit idly in the bank and become worthless.
Ed Matthews
At this stage in my life it’s safety first. The little bit I would put at risk right now isn’t enough to diversify much. ETF’s sounds good to me for their low cost but read once that ETF’s are for short term, one can get burned badly hanging onto them too long. I don’t understand that and am trying to read more about that and find out why that would be true.
I use mutual funds for our investment. I use managers I that have traditionally performed wisely & have their own money along side of mine. In addition, I am influenced by people like you. I have no scientific tools to identify the direction of our investments, have no specific way to determine the % in each area or when it is time to consider a change. I mostly rely on the decisions of the fund managers.
I don’t have the knowledge, resources, and patience it would take so that is why I subscribe to your newsletters.
Martin The truth (in my view) is that no one knows what the future will bring.
If this is even relatively true then the guiding priciplas can only be balance and logic; as you and your highly credible team suggest , gold and resource stocks are logical plays.
Top quality equities in India, China, Brazil and S Korea should be a part of a balanced portfolio but in my perhaps contrarian view so should carefully selected US Real estate.
The cost of building is not about to drop any further than present levels, there is a huge choice of foreclosure and other property available at well below replacement cost and there is strong demand for rental property even if this demand needs more careful than ever qualification and checking.
As a five year play I believe that real estate is a worthy part of a mixed and balanced portfolio from a moral and social responsibility position as well as a strategic perspective. Putting tenants into empty foreclosure property also begins to underpin the very slow recovery for this sector which I concede will take years.
The above views are those of a regular visitor to this still great country; I am just about to return to the UK and France where my own ‘portfolio’ will be centered on the development of a chateau estate into 5 star apartments built to sustainable housing guidelines for energy efficiency. The project will provide an interesting Euro investment which will generate reurns in the range 4to 7 % based on the large number of visitors to this particular part of France ,still the most visited tourist destination in the world.
I would relish the opportunity to provide some notes on the Real Estate market and related opportunities in France if this might be of interest.
With Kind regards and every kind of good wish, I look forward to a productive relationship with the Weiss Group over the next few years.
Tony Botsman, DDa, MBA, Minneapolis and Chateau de Ceint D’Eau Figeac France
In my case,i have about 75% of my ira and cash in cash.the rest in oil & mining stocks.how do i know—I don’t-I’d much rather be fully invested.I keep waiting for the big pullback to buy some silver -I’am afraid i’ll be like the little boy on the inside looking out as the market and precious metals head up the road in a cloud of dust.
I think politics trump everything right now,unfortunately.Midterm elections will allow for continued loose money and entitlements which goes with my thesis that theme based investing is critical.Dollar and interest rates are the drivers.Until election long stock market and commodities and willing to swat the dollar rally mosquito and not try and time things to cutely.simplicity is wisdom.Ps don.t fight the fed whoever it is as it is and will forever be politicized.
I have recently retired, but still retain my RIA license. My professional career peaked while developeing investment strategies that are hedge fund level through the use of arbitrage, hedging, market timing, etc. Setting aside that level of investment management, I would recommend that investors use a combination of guidelines involving a macro-economic model indicating where we have been in the business cycle. The OECD out of France has some great ideas on how to build such a model. Coupled with that, I have put together a sector rotation guide that is an above average in returns. The key is to know the investment tools you want to use, be prepared to pull out of any position to keep losses small, always be anticipating when the money flow begins to move forward into the next “sector’s” cycle, and remain diversified across two, three, or four sectors/subsectors at a time.
After 28 years of market timing (different from the strategy mentioned above), I found that the best way to do it was to know who on wall street makes the most profits while being subjected to the least risk. There have been, and still are, those professionals that are so big that they tend to start the herd moving in the direction for which they are already positioned. The are parasites on the public. When you can determine who they are, then side with them. These wall street entities are very smart, and they do have to change the way things are done through lobbying efforts with congress and the SEC to keep the “rules of the game” in a state of flux, because people like me beging to jump on their “gravy-wagon” and it cuts into their profits. I have had to “retrench” (go back to the drawing board) and find out how to identify their positions relative to the public three times in my career. Since November/December of 2008, they have shifted things again, and rather than try to figure out a market timing strategy again, I have simply retired. The work can be exhausting, and I’ve gotten too old and lost my love for the challege.
My approach to the markets has always been quantitative in nature for determining the bigger picture. Once it is determined what kind of positions I would want to take (including the best investment tools to use), technical/analytical methods were used to determine entry and exit points, thereby allowing for minimum risk. The goal is to catch a trend and ride it, never letting losses become to great at the beginning of catching that trend.
My mentors have been, Norman Fosback, Mary Zweig, Edwards and Magee, Elaine Garzarelli, and a retired military man (whom I will not name). This man had an I.Q. of 181 and it was like walking the footsteps of the “Jolly Green Giant”. He was in crytography in the military, and his hobby was beating wall street. He applied codes to various chart patterns of the public investors’ investment patterns, and he did likewise to the professional investors. It was incredible to see that 98%-99% of the time the professionals would “dine” on the public. They didn’t have to do anything else in life to make a living — just “feed” on the public investor and live a fat and happy life. Well, it has been nice to ride the “waves” with them, but they do hate that — so from time to time they are smart enough to realize that they need to change some rules to confuse people like me. Then it is crunch time to find information to again determine how and when they are taking positions.
I would be agreeable to share some of the methods that I have used over my career as I am now leaving that arena and plan to get into politics and see if we can’t turn around this nightmare of governmental interference into our lives. I am waking up to the horrible mess America is in, and hopefully can help get government back on track to preserve the liberties and freedoms given to us by our founding fathers. Your writings that I receive have been insightful — thank you.
Sincerely,
Chuck Bateman
Martin Weiss Reply:
January 27th, 2010 at 12:17 PM
Chuck, all investors have a lot to learn, and you have a lot to teach with a treasure chest of wisdom to share. I find your insights on macro-economic and sector cycles of particular interest and would love to discuss them with you if we have the opportunity.
I agree with most of what you have to say, and you say it with such precision, I have little to add. My main point of disagreement — at least in emphasis — revolves around following the big money on Wall Street. Can it work well? In normal times, yes. But in this new environment we’re living in, I feel it may be too risky. As you’ve also indicated, there are some grand — and potentially very dangerous — exceptions to the Big Money success stories, such as the experience of 2008. Let’s not underestimate the possibility that, in the years ahead, those exceptions may become the rule. — Martin
I listen to several services that have been around for many years. As far as what to buy and sell I have to listen to the ones I subscribe to, including you. I have been at it for a little over 50 years. The bottom line is, it still has to be my decision.
Dear Mr. Weiss;
Thank you for offering me the opportunity to voice my opinions on investing needs. I am certain that a lot of people find themselves in my shoes, hence I find the courage to speak up.
My wife and I make enough money to live comfortably, but not enough to take wild chances with our retirement money. I have used different types of investment strategies in the past, including having a financial advisor manage our money, to managing all of it myself. Needless to say, I am seriously dissatisfied with both strategies, and the outcome has been disastrous using both.
A lot of people think that they can manage their money effectively in between full time work, kids, school, etc. In my experience, this does not work, and while some people may get lucky with one strategy or another temporarily, in the long run, the market beats everyone out. From all of my investing “adventures” so far, I have learned one thing and only one: the best long term strategy is to invest in future trends, period.
The problem is how. For example, I know for a fact that investment in foreign currency is a good hedge against the coming collapse of the dollar, but to this day I don’t know which currency, and which vehicle? In case of a market crash, are ETFs safe?
Two things are for sure. I have no time or interest in learning too much about finance and economics in order to manage my money so I would rather have someone else do it for me; and I don’t want to pay vast amounts of money to have someone manage my money and later discover they’re ineffective at it anyways and no better than if I did it myself randomly. So the real need here is for middle class income earners to have someone knowledgeable manage their money reasonably well and perhaps with some form of compensation based on performance.
Thank you for listening.
China is where to place your bets. Their government has tasted prosperity….no turning back now. China based ETF’s run by American Professionals seem the safest vehicle. The demographics in China boggles the mind as you contemplate the size of that market, the fact they are really just getting started, and as I stated earlier……a government committed to exploiting the same. It’s like getting another chance to invest in the DOW where it was in the 1950’s. Only the market is MUCH BIGGER!!!!!!!
the only way to intelligently risk investing wealth is to put it into modalities where ALL available long term evidence indicates this investment wealth will maintain or hopefully increase the investor’s real purchasing power beyond the future vagaries of a declining net multifaceted inflation/delation/currency crises base.
the only modalities i am aware of that currently fully satisfy this criterion are silver buillion, gold buillion and a mixture of several carefully selected precious metal equity issues including IVN, FCX, SLW, GDX and GDXJ.
Supply versus demand, that is the basic metric.
In today’s world we have oversupply in the face of weak demand. For proof, consider
*factory utilization rates in the US or China (low, in the 70% range).
*The Baltic Dry Index, a proxy for the pace of global trade measured as the cost of sea borne transport of dry goods. The BDI peaked and is on the way down again – despite trillions in borrowed money global government stimulus spending that temporarily boosted demand.
*The US housing market where just the anticipation of removal of a tax credit caused buyers to disappear. December new contracts were down 17%.
In short, no credit for the US consumer (who used to supply a significant fraction of global demand by ’spending tomorrow’s money today’ but is now unable to spend), while Asian consumers (who traditionally ’spend today’s money tomorrow’) have been on a spending binge recently but now appear to be pausing: Chinese market down 10% in past few months; Chinese government tightening credit.
If this trend is likely to continue, the question is: Where to invest?
One answer is: Invest to profit from the decline in prices.
Examples:
*short overpriced commodities
*short high p/e capital intensive stocks
*buy US gov’t short bond money market funds
Stay safe and look for the next turn in demand, gov’t stimulated or otherwise.
I am done listening to the so called “experts”, I get informed,
on the internet and newspapers, what people think about trends, and
issues on our economy and abroad. As a result, I form my opinion, listen
to my gut feelings, and develop a strategy. I wish I had done that in
November of 2007. I was persuaded not to sell by the so called “expert”
that told me that I was in it for the long term. Fool I was, I even told him
that he was violating his own principles of buying low and selling high.
i am a complete ignoramus .i subscribed to your service hoping you will tell me how to protect us from disaster. my husband and i are sr. citizens and retd., living on limited income. if i knew how to invest i would not pay for your advice. i do get some guidance but never an indication when to leave. i know everyone is in for making money but can you give specific buy and sell advice for seniors trying to survive ? we are not greedy and we are happy with modest gains.
Martin,
So far, I am only investing in bull markets. As such, I protect my positions by setting stop losses internally (not with my broker), watch for critical lines of support to be violated (200 dMA is my “danger” signal), put 20% of my portfolio in physical silver bullion, 10% in Numismatic gold coins, 15% in currencies, 5 % in government bonds, and 5% in warrants or resource companies. It looks like we are moving out of a bull market, and would like to short sectors, but the only short I have now in the euro.
Beyond that, I know I have a need to “figure out” how to monitor when a sector/asset class has been ignored too long – I am not sure how to do this.
I am in the midst of changing brokerage firms: the present wealth management people were not experienced enough; their strategy seemed to put everyone in the same pot and bought and sold at random but not in my best interest. I don’t trust 99% of the money mgrs and will probably get into more dividend paying stocks with some Vanguard funds to hedge the volatile market. Will also keep some cash in FDIC insred institutions.
Hi, Martin, These questions are certainly thought-provokers. My recommendations for a new or puzzled investor:
1. Now is the time to learn to think about investing with a strong dose of skepticism about all kinds of investments, and investment gurus.
2.. Read, read, read and study-with a pencil,hilighter whatever.
3. i believe there is NO Reliable ’scientific method’ to create an ideal investment strategy. sorry about that.
4.I’ve been at this for 38 years, and I’ve made lots of mistakes. the biggest one is failing to watch specific industry movements and news regularly.
5.If you are buying any stock, due diligence is the rule: Is it the right time for that industry? Is it safe? Are there dividends or are you going for growth? Is this for the long term? If is for a short term are you going to watch it on a daily basis? Do you really know what the company does? Do you really trust your sources of information?
6. I have never been in favor of ‘asset allocation’ as such. But I am in favor of owning several investments in different businesses and countries.
7. Listen to or read many types of newsletter writers. Try to get opposing opinions.
8. Trust your own judgement. You’ll make mistakes, but with every dollar lost, you will gain self-assurance. And again, Always keep a good dose of skepticism as you go.
9. As for reading material, I began my knowledge of investing with Richard Ney’s “Wall Street Jungle” 1970, and Benjamin Graham’s “The Intelligent Investor” 1973. Might try Janet Lowe’s “Benjamin Graham on Investment” 1994. Betty R. Lee
First off I would not recommend stocks first although they have a place . I would first get a core holding of gold and silver . Then if your in your own business I would invest into equipment and stock needed to run it . Then enough cash to hold you over for six months , after that I would look at stocks of both foreign & domestic countries that are likely to remain vital for the long run . Rare coins is another way to get appreciation and enjoyment wile your investing .
Not having much money to unvest in the market, I chose Penny Stocks for now and hope to eventualy mack enough to get bigger stocks.
I have three stocks in Energy. One in Algae>oil, another in Oil and another in Supplying propaine and lubricants.
I also have stock in a Silver & Gold mine that will come on line hopefully in the spring in Nevada. I also have stock in a minning Co. in Canada that has very good locations in Peru.
If I had enough $, I would invest some in Medical and Electrictronics. Maybe next year.
I also trade in Currancey, which is high risk but beats the Slot Machines.
I like growth at reasonable risk. Years ago you could get 13% yield on an electric utility but some of those companies went out of business leaving investors high and broke. Others pay less but still are chugging along. Cash money is a good measure. A company can not payout earnings if there are none. I try for good bonds and hold until maturity. Now one must consider the political risk as well as market risk. Trends are your friend but you must be vigilant and nimble. Old Harry Schultz in the 1970 got me on to hard assets.
It never hurts to own some gold and the like. The world still needs oil and a lot of it.
I like ETF`s with iShares, etc. A balanced portfolio for me would be:
Domestic stocks (Canadian) 15 %
Foreign 10
Gold 10
Prec. metals 10
Energy 15
Nat. Resources 15
Bonds (Div. yielding) 25
The big Fund Managers go by Performance. They take chances, that is how they get their BIG bonuses. So, if they guess wrong, too bad, better luck next time.
At 83 yrs I have no time to recoup from a disastrous mkt. I have invested for
income in mostly very (safe?) Pfds (some AAA) and a some bonds tax exmts,and utilities
totalling about 30% of my Assets.The rest is in what I believe to be the safest bank
(NC State Employees Cr Union)CD’s & Money Mkts.They wrote off about .75% in bad
debts last year.I do have some (10%) in commodities and some inverse Interest rate
issues you recommended.
I am wondering about commodities if theyh will indeed rise(in $) w/inflation..it seems
logical but it is not historical. In the 40’s the farmers would immediately plant enough
to keep the price down..increasing to hold up gross as the price went down. I don’t think there are enough farmers now to do this however.
In short I’m using instinct made from the news but not following any brokers whose only story is to diversify in (good)stocks and ride it out. None ever blew the whistle in
2007 and 2008 but I got out of (good)mutual funds in time.
I am also trying to decide that as the dollar deteriorates worldwide will the value here hold because we need them and it is going to be hard to make any.
The vagaries of the mkt seem more impenetrable than ever.
Notwithstanding all this the Fed is cheapenig at such a rate I don’t see how we can
maintain anything near parity. I have gold and silver but less than 5%.
I don’t think you can make a case from my thooughts.
law
No statistically reliable market-financial information is available to anyone: to the government, to no-value-added-parasitic establishments (no added value = no goods to sell = anti-capitalists), to added value capitalist corporations, to nonworking “investor” class, and to working citizens. All must go by the guts only.
Best regards (and luck!).
I want to remain diversified.
I check the stocks for industries and follow the price appreciation or decrease. I diversify with industrial bonds and mature in five to seven years.
Contra $ assets: Gold,Silver Oil,Water,Uranium 35%; TIP 10%,Treasury only
money market 25%, Infrastructure stocks 10%, Foreign dividend paying
Stocks 10%
Question One: I am a novice so I have to depend on someone like you.
” Two: Your skills and analytical tools.
” Three: Depends on risk/reward and what I could afford including your advice.
” Four: Again, I would depend on your early proven detection skills.
I would start with the volatility of the vehicle used, look at the recent range and decide on the stop points. Then I take the portfolio loss I was willing to endure before I would conclude my thesis wrong and divide this amount into the number of different classes. Now I would have an amount I would be willing to invest in each class.
I would look at the upside now. If the expected upside is less then 10% then I would take 50% of the investable money and buy the vehicle of choice for the particular asset. I would invest the remaining 50% upon a positive move of a few points. IF the expected return is more then 10% then I would take 33% of the pool and invest the remaining in 3 more layered buys after a couple of points positive move.
This reduces expected profits as compared to a full investment up front – but it reduces downside. It offers me some ‘protection’ in a growth only portfolio in case there is a dramatic sell off and I cannot get my initially estimated sell points. With a market which I feel is bought with the expectation of perfect numbers I would prefer to be as defensive as possible- and actually prefer to have some downside plays – but that is not a growth portfolio.
Martin Weiss Reply:
January 27th, 2010 at 12:19 PM
Larry, I believe wholeheartedly in the goal of accepting less profit potential for the sake of better downside protection and capital preservation. For very conservative investors like me, we can actually design portfolios in which preservation trumps potential. But with a model and tools that give us more confidence in the probability of success, I am also willing to invest more aggressively, designing a portfolio in which profit potential is paramount. — Martin
Hi,
Your most recent question hits it on the head:
In my past associations with financial management complanies, most bought large blocks of shares of a particular company and then split up the shares to each investor. They made a market in each company they purchased & as a result, I never really knew what price they actually paid for or sold each stock for. The biggest decision is knowing when to sell the stock.
Today it looks like the governments have as much to do with investments as the individual companies do. Look at which government seems to be the most reliable, consistent., and helpful. China seems pretty responsible right now, U.S. pretty erratic, Australia steady, Europe–?? Oddly, big companies are even more susceptible to governmental whims than small ones.
ASIDE FROM WHAT IS OBVIOUS MY CHOICES DEPEND UPON THE FOLLOWING STOCKS.
1.FERTILIZERS2.WATER 3.OIL4.GOLD5.FOOD6.CHEMICAL7.TRANPORTATION.UTILITIES
1. Divide your money equally into Blue Chips (U.S.),Mid Cap (U.S.), Small cap (U.S.),overseas (EFT or no load mutual funds(like Vanguard, T.R.Price), precious metals(EFT or no loads) , natural resources (EFT or no loads). Put your money in 20% at a time and space it out over 1-2 month intervals. Don’t try to time the market and don’t be greedy. If one sector booms, start a gradual withdrawal into a money market. If the market goes against you (say by 12 1/2 %) get out and wait for a chance to reinvest again gradually at 1-2 month intervals.Don’t be married to one persons advice. Those that do best in up markets usually are the worst in down markets and vice versa.
Even mutual funds have bad years. Check their long term record and how long the current manager has been in place. Mutual fund families usually will exchange ideas with one another.
Martin
It seems to me:
1. Breakdown on all major averages from March to Dec rise
2. Breakdown on the Euro
3. Easy counts on the Elliott Wave
4. Profits good vs sales stink
5. Unemployment close to 20% (the real numbers)
6. Potential Breakdown of Long T Bonds
I can be wrong but I can go on.
The first item to evaluate is your own situation, both from a financial point of view and also your own risk tolerance. Depending on your age, the security of your job and that of your spouse, and your current and future costs only then will you some idea of the most important factor – which is Asset Allocation.
If you are risk averse then you will be putting a large portion in fixed instruments like Treasuries, this would also apply if you are close to retirement. However, returns from these types of investments are very low and will not cover inflation, which will pick up soon.
So for a balanced portfolio, I think you want a 60%/40% equity to fixed investment in the general case. Having 100% of equities is too risky and 100% in Treasuries will not preserve your falling US value. Somewhere in the middle, depending on your situation is what you want.
If you want to make life easy for yourself, you decide on a buy & hold strategy and buy may be 4 or 5 ETFs in 1. US equities (tilt to small cap and value ETFs) – 20%; 2. 20% in FXI or Asian economies; 3. 20% in gold and other resource ETFs; 4. Short term Treasuries 40%.
Once a year you rebalance the portfolio. No scientific tools – just read Money & Market for interest and for their portfolio ideas – but leave the day trading to the experts and people with the time and money to gamble.
A well balanced portfolio of ETFs, which you re-balance once a year is a stress-free route to sensible investing.
hi facts are always changing according to truths-to win need to acesss trends trends and when to do opposite =hence yr charts reflect what majority thinks=herds rules cheers kind regards aw
I have bought Iraqi diners and am waiting for them to rv. In the mean time I am trying to learn how to invest and and understand the market and everything concerning that. I am 80 years old so am not looking for retirement but income to add to my VA widows compensation and Social Security. I have a busket list that is sort of big (Ha). I have a idea how much I would like each month to add to my present income and that is $2000 more each month to add to my $1800 a month. I rent in a senior apartment which I like- no cost upkeep, no grass to mow – etc. I have been reading your page that you send along with Wealth Daily. Beginning to understand – I think – some things about investing. Look ing for guidance. Any suggestions. Thanks Evelyn
If I were 20 or 30 years younger I MIGHT be willing to make a serious study of investing and how to be one’s own judge of the good, the very good and the not-at-all-good. As it is, at the ripe old age ( though healthy, thank God) of 76, investing is important to me only as I hope for it to keep me comfortable down to my grave, and especially after my husband’s likely pre-decease, leaving me with only approximately half of the pensions that now allow us to live comfortably.
In view of that, and my own innate or previously cultivated talents which tend more to words than figures, I am a total ignoramus–well, almost total–about investing. What I read about general trends and market conditions are comprehensible to a point, but I can’t imagine being fascinated by the details of how the market works as I presume true financiers are and must be.
Therefore, my answer to all three questions is simply that I am dependent on the sources of information that I believe to be honest and knowledgeable. And I would be very grateful if Dr. Weiss would offer us some advice on the issues he has raised, both in general, and with as much specificity as he deems useful.
Rebeccas S Lyon
And how would you know when it was time to CHANGE your portfolio structure to avoid danger or to harness emerging new profit opportunities?
This question has multiple answers. The market volatility since end 2008 causes one to worry much more about sector rotations that are made by institutional traders. If you want to be sensitive to this you have to be prepared for changes in the time frame of months. Prior to increased volatility, I used to consider re-balancing annually. The current market climate forces on to consider being a trader rather than an investor.
Right now the decision is very easy! I don’t have any cash to risk! The folly of being a really small business man! I am just wanting to do my best to NOT make the situation worse! I have a great little automatic car wash I’d like to sell at a loss — but only because I can’t keep up with it!!
I INVEST MOST OF MY MONEY IN TECHNOLOGY AND BIOTECH/ PHARMACEUTICALS. I HAVE A SMALL POSITION IN ENERGY. I KNOW NOTHING ABOUT TRADING IN FOREIGN CURRENCIES. I OWN VERY FEW BONDS.
I ALWAYS LIKE TO BUY AT LEAST 100 SHARES OF A STOCK. I LOOK FOR GREAT COMPANIES AT GREAT VALUES. I FIND THAT THE OIL STOCKS ARE ALREADY TOO HIGH. GOLD WAS TOO EXPENSIVE MONTHS AGO. THIS IS WHERE I AM NOW. JANET
1. Currently the investment program avialable to me allows for only investments in money market, bonds or mutual funds.
2. Due to the limits stated above it is very difficult to allocate funs properly as there is no exposure available to some of the best sectors such as commodities especially precious metals.
3. Such as it is I attempt to make decisions based on research from newsletters (such as Weiss publications) and fund data primarily provided through Morningstar.
The old saying that ” the truth is very elusive ” is more true today than ever before.America has be come the land of untruth and illusion. so any information we can obtain is not verified. So the only thing left to investors is the GUT FEELING.
Martin,
My approach to investing hasn’t changed much in 20 years. I don’t have much that I can afford to lose so I have always been pretty cautious. I try not invest in markets that I don’t understand and I check everything that I read. That said:
Question #1: How are YOU deciding whether you’ll invest in:
1.) Domestic & Foreign Stocks: I would like to say that I have a good stock analyst whose advice I trust, but I don’t and I’m not sure that one actually exists. In general what I do is look at the advice given in Money & Markets, Uncommon Wisdom, certain industry trade publications (various industries with which I am familiar) and a few other publications. From there I do my homework, I know that you have said you’re not fond of analysts/research but I don’t invest in any stock that I don’t know pretty well. I’m not a big investor and I haven’t got much that I can afford to lose. As far as foreign or domestic stocks I’m impartial on that point if my research indicates that a stock is positioned to move up I’ll play.
2.) Gold and other precious metals: In general, other than silver which has had its problems over the years, precious metals have always been a fairly safe bet. I have found that timing in the precious metals markets is really the key. I have numerous contacts in the scrap and precious metals industries and I try to glean what I can from them.
3.) Energy and Natural Resources: as far as energy and natural resources investing I watch the global markets. Whose buying and how much. When demand is high, world economies are in a growth mode and lots of infrastructure improvement projects are out for bid/on the drawing board, I generally like steel, copper, and oil.
4.) Foreign currencies: I did pretty well with foreign currencies in the early nineties when I was spending a lot of time in the far East and Southwest Asia. Not something I have had much time for recently but there have been a few interesting opportunities recently that have peaked my interest.
5.) In general I’m not a big fan of the bond market. The whole bond rating system seems shady to me. I do hold some short term treasuries but even those ,in light of the recent money printing spree that the treasury has been on, worry me a bit.
Question #2: How do you know how much of your money to invest in each area?
As I said above I am not enthralled with any sector in particular of late so I am largely in a hold mode right now (i.e more liquid than has been my habit in the past). However I do have about 10% in stocks that I watch like a hawk. I’ve got about 20% in precious metals. My energy and natural resources holdings are pretty slim right now at around 12%. Foreign currencies are at 0% at the moment and have been for quite awhile. Bonds are at around 5%. I try to diversify as much as it makes sense to but I really am looking for buying opportunities, and staying pretty liquid until something attractive presents. My liquidity has allowed me to invest in some real estate holdings recently that were just too good to pass up. Unless things change or there is an appealing opportunity in a particular sector, I don’t see those percentages changing much in the near term.
Martin,
Here is my way of building my own portfolio and when I get in or out: From the March bottom, I screened the best performing ETF’s. They where all foreign ETF’s. I then split my portfolio between the five best performers. Those ETF’s where IDX(Indonesia), RSX (Russia), PIN (India) EWZ (Brazil) and FXI (China) in the order of thier performance since the March bottom. For my short term porfolio (IRA and Roth IRA) I use the 13/34 day Exponential moving averages to decide when to buy and sell. For my long term portfolio(taxable funds) I used the 400 day moving average to decide when to buy and sell.
Since the March 2009 bottom, I’ve had some very good gains, with only a couple of short term sell/buy signals.
Prior to the March buys, I had been mostly out of the Market (short about 20%) since the January 5, 2008 sell signal (domestically) and roughly the July 2008 sell signal (overseas) using the 400 day moving average in my long term portfolio.
Mike
I would diversify, I would find someone that is conservative and someone I trust to help me not himself and check out his past and then decide. I am at an age that I need to keep what i have to live on and have some growth bur little risk
Good morning Dr. Weiss, the question you ask is so multifaceted, i have a hard time knowing where to start. Primarily i am utilizing your services, which i have come to rely on a great deal, to try the scientific approach, rather than rely on my gut, which is tempting, as i am sure it is for alot of other people. I have already invested in heirloom seeds, and am currently concentrating on poor mans gold for hard currency needs in the form of pre 21 morgans as close to spot as possible, as i can work them into disposable income. I haven`t had the courage to go farther into the remainder of your recos yet, much as i would like to; because no one has been able to tell me if the natural resource and other investments can safely be entered into on a dollar denominated basis; or if i should invest using another currency. i am thinking about government regulations. i would very much like to know your thoughts on the preceding before i go further, since i am trying to determine the financial exposure of a loved one ass well as myself. respectfully, Ralph
I have no answers to your questions, but I would certainly like to have intelligent answers.
10% of total in Gold 7% in bullion 3% in CEF central fund of Canada
Out of Stock at the current time
10% etf veu International Stock Index
10% etf spy S&P 500
10% etf vbr Small Cap Value
10% etf dbc Commodities Out at the current time
10% etf vnq Vanguard REIT Out at the current time
30%_45% Bonds
etf bnd Vanguard Total Bond Market Out at the current time
etf TIP 30% in at present time US Treasury Inflation Protected Securities
etf WIP 5% in at present time International Treasury Inflation Protected Securities
etf BWZ 10% Intenational Short term bond, In only 3.3% at present time looking to add to position if there is a pull back
10% speculation at present time 5% LIF iShares Latin America 40 may exit soon stop loss in place
Thats about it for now
Dear Dr. Matin Weiss:
Thank You for your response by sharing what you have to offer.
Presently as a Senior past 75, I am on a fixed income ith a Reverse Mortgage since Jan. through May 2008 in ” Option House ” with my son – in – law and the Reverse Mortgage fund. The money of 4 115,000 on this Joint Venture with my Son- in – law who has a Land Development Company incorporated in Nevada, is tied up in a foreclosed Real Estate Property and Wall Street – not my home since May 2008. The Real Estate property which was completely remodelled before May 2008 and on the Real Estate Market since May 2008 is not selling in spite of interested buyers since Lenders are holding back to this day.
As of this year we decided to rent with an option to buy this other 4 Bedroom Home. In the meantime my Son – in – law keeps on trading with ” Option House ” trying to recover as much as possible what was lost.
Have also established in 2007 a Private C corporation in Nevada with no activity in which my Son – in- law and my daughter are the principal officers.
The information which I requested is primarily for my Son – in – law and me.
Thank you and God bless you also !
Karl H. Goesele
Dear Martin:
I have a simple answer for you: having studying for several months information comming from distinguished members of your staff, that base opinions on facts and thorough analysis, I decided to join your Elite Group and receive your publications to base my decisions on something better that feelings or guts.
Carlos…
What would be nice would be to send “reporters” to the different companies to discover their strengths and weaknesses, and rate them on a scale such that investors could make reasonable choices regarding the risk and profit they are willing to expose their investment to.
please correct error in last phrase: instead of “that” should say “than”
Thank you for your understanding
All these questions first and formost depend on the temperment, financial circumstances, risk aversion level, stage in life, social circumstances of the investor. This has to be determined before any investments are made. The first question is “can the investor and investors family survive comfortably” without the use of the money used for investment. If not, don’t invest in anything other than basic living expense.
If the investor determines that a portion of wealth could be invested without jeopardizing the solvency of the investor and his dependents, the question is “how much?”.
The question then becomes “invest in which investment vehicles. I believe there are no “sure things” in any securities, including Treasuries and CD’s. I believe that a person must invest on probabilities rather than scientific certainties.
I believe that the prudent way to begin is to invest in income producing securities that gives some assurance of capital preservation or in real estate. I believe that one should always have core investments in investment grade bonds, treasuries, insured CD’s and real estate. When the investor feels safe to up the risk level, then equities can be considered.
The waters are always unsafe with equities. Many people “gurus” try to convince the public of their wisdom as see’ers to correctly predict future market moves, or stock moves. I don’t think they can do it. I made most of my money in the past year trading in”F” rated stocks by the analysts in my brokerage. By the time they got around to increasing the stock ratings to A or B, the stocks had made their money and I was out.
My strategy is always to move from safety to risk, gradually, if at all. There is high and low risk in every classification of investment. So I move to the most safe in each type of security.
No more comments.
To begin I would establish criteria for the investments. Are they safe? What’s the debt load of the company, the property, etc.? What’s the collateral I receive for my investment? Is the investment in a country that has enforced laws that protect investors from fraud? Is the investment insured? What’s the strength of the insurance company (ie: is is AIG?)? Are the assets tangible or just a piece of paper and a promise?
I’m not aware of reliable scientific tools that can be used to identify the most profitable asset classes. There are lots of people with lots of charts and graphs, how scientific they are is a good question. Do they really consider all the variables in the economy? Although economics sometimes claims to be a science I’m not sure that claim is justified. One needs to understand the global, national, and local economics effecting an investment before jumping in. Beyond that the prospectus should give some clues, but should not be totally trusted. Industry analysts can also give facts, data, charts, etc. to help with the decision.
Never invest all your money in any one thing. That much is for certain. Make sure your investments keep the #1 rule of investing in mind: “Don’t lose your capital.”
There are indicators as to when it’s time to change investment strategy. Things such as changes in tax law, changes in interest rates, changes in societal honesty, changes in the inflation rate, changes in employment and job creating, etc. Currently there is a lot of fraud. That makes it much more difficult to know who to trust. Trust is being lost. That is why so many have fled the stock market, the banks, and other forms of joint asset ownership. Who wants to give up control to crooks? That is also a reason that many have switched to non-leveraged real estate, precious metals, business ownership, and other assets they can control and put their hands on. In times like this we focus more on wealth preservation than on growth. As Mark Twain said: “I am more concerned about the return OF my money than the return ON my money.” (and yes, later Will Rogers.)
1) Asset allocation process using quantitative techniques to determine whether each asset class is fair value, over valued or undervalued, using time series of 50 years or more and not just last 25 years.
2) quantitative techniques using mean reversion over long time frames, and trying to assess current situation as compared to previous situations.
3) a diversified portfolio using most undervalued through to fair value taking into account macro fundamentals.
4) As fair value was approaching avoiding being too greedy and sticking to hurdles being achieved or if possible very tight stop losses to protect the target achieved but giving further upside potential if the market continues to run beyond fair value
Dear Martin,
Iam looking real hard at possible investing in the further.
My father passed away at the age of 93 years. He worked as Chief Project Engineer for
Republic Steel Corp. 35 years. And also for an associate firm for another 12 years.
If I knew my father he invested some of that money. I won’t know any amounts until the 2009 taxes are paid.
Until then Iam think of domestic and foreign. Minerals and Energy
I see all these comments bashing “Wall Street” portfolio managers as clueless trend followers. I think that is a little gratuitous. Think about what a lot of the public does when investing in mutual funds- they -”the public” pile in to the hot funds. The ones that are performing the best. And of course the opposite is equally as true.
So how does this effect the fund manager. At the top of the cycle, when he/she knows that the stocks are overheated- people are throwing money at the fund. And at the bottom, when stocks are finally cheap and the manager would like to buy- fund holders are liquidating en mass- and the manager has to sell to satisfy redemptions.
So people are quick to blame the manager while never thinking about how the “group think” of the fund investors effectively work to hurt performance.
I’d like to see some information regarding Canadian Stocks.
I’m particularly interested in PKI.UN
My portfolio is all invested in dividend paying stocks!
I think that is the best way to keep abreast of future changes.
Mac Proctor
“Gut instinct” is not an investment discipline, nor is “hope.” I use a top down approach (and I manage portfolios) that relies heavily on technical analysis, research I purchase independently. Relative strength provides a souless barometer to give guidance as to what to buy but more importantly when to sell. It also provides information as to which asset class to utilize and when, growth vs value, large cap vs small cap, domestic vs international, cash, fixed income, commodities, currencies. How investors or money managers can just “wing” it I have no idea. The concept is ludicrous as is just using fundamental analysis (fundamentally flawed). Some (most) money managers brag they don’t use quantitative or technical analysis. Why not use ALL the tools available?
I invest with three strategic considerations and/or cliche’s in mind: 1) Don’t put more than 4% of your investments in one stock i.e. diversify, 2) The value of stocks revert to the mean and 3) The trend is your friend.
I rebalance quarterly. Tax sheltered accounts work best for this approach and for taxable accounts I generally rebalance be adding new money to bring below target investments up to target levels. I stress dividends and they account for a significant portion of the new money. I minimize trading costs by investing through folioinvestments.com where I have what amounts to unlimited (at least for my purposes) trades for about $300.00/year as long as I trade at their twice a day times, what they call “window trades”.
Most of my investments are through ETF’s so I tweak the 4% rule and am willing to invest up to 6% in any one national ETF like Brazil, China, Spain etc because they consist of many stocks. But I do keep individual stocks and sector ETF’s like energy, utilities, commodities below 4%.
I am overweighted in US ETF’s because I use large cap, medium cap and small cap split between growth and value ETF’s (I simply have more US ETF’s than ETF’s in any one foreign country) and I seek foreign stocks because of generally higher dividends overseas and because I believe the USD will devalue compared to developing nations currencies especially Brazil and China for an additional appreciation boost – with very little downside risk that the USD will appreciate in relative value.
At rebalancing time, ETF investments that are well above my 6-month average returns (capital appreciation and dividends) can receive as much as 6% of my money and investments that are well below the 6-month average receive as little as 1% of my money. For the most part I don’t rebalance my individual stock investments but I do sell the excess above 4% and sell/reduce positions where the market is telling me I am very wrong.
I have struggled with the allocation question between ETF’s, individual stocks, each country, and currency valuations. Not to mention energy, precious metals, transportation, commodities, and so on. I keep about 65% in ETF’s and 35% in individual stocks. I don’t have a definitive answer for the allocation question but my approach keeps new money coming in to out of favor investments by selling in favor investments (but keeping in favor more highly weighted) so that when out of favor companies/sectors/countries revert to the mean (my average return) or exceed the mean I will be able to shift investment from those formally in favor to those currently in favor as the change in trends develop.
When markets are in turmoil and panic rules I either follow my rules, do nothing, or move into cash. If I move into cash I start dollar cost averaging back into the markets within 90 days of taking cash out. I have only taken money out of the market one time and that was 2008, most of the money was back in place by March 2009 when the markets started to rise.
Since April 2001 I’ve had 80% appreciation (not counting dividends) following this approach vs. -1% for the S&P 500 (no dividends).
I don’t know for sure, but from listening to Larry, Tony and the other guys, I would think I should get some form of gold, pho,chk, or xlu, etp, cnsl. There’s so many that look good. Being that I have little to work with, compared to you guys, and I’m afraid of losing more, I’m not sure where to start. I don’t know how to do options ,starts and stops or charts, so I count a lot on what you guys think will perform well this year. I am thinking of leaving my broker, because he doesn’t think China is someone to to do business with, and I can understand his side but I think if you go through nasdak and nyx, it should be ok. I’m not sure how much should be allocated to each stock, I’m working with about $10,000 now. Maybe I shouldn’t be in the market at all now?
I rely on a small co. based in Shawnee-Mission, Ks. their funds name are Buffalo Funds. They have some of the best fund mgr’s in the country. they have been in business 20 plus yrs & this yr. all their funds did 40 per cent or better, was one of their best yrs. they do not on gut feelings. All the above should check them out, they are written up in top publications regularly. I do enjoy reading martin,s informative e-mails. mary
Dear Martin,
Thank you for all your expert advise over the years. I keep a portion of my portfolio in U.S. based silver stocks. My favorite is Helica Mining (HL). It has no debt and is well-run with tested management. My second largest portion is income stocks that pay a monthly dividend: PFF, AGNC, PSEC,O, etc. The commodity ETF’s make up the balance of the portfolio: GLD,SLV,MOO,FCX DIG,and PBR,FXI.
I am 66 and still working as a dentist (pediatric dentistry and orthodontics) and hopefully will never need the financial security that your advise has provided for me. However, it certainly helps to have it!
Regards, Jeff Ahlin,DDS
1) I treat stock picking newsletters like stocks themselves. They all have some level of money-back guarantee, I rank them buy/hold/divest based on their performance.
This sort of guarantees that the services that give me the best returns wind up driving my picks. This also drives my diversification.
At the technicals level, I (a) use stop-losses that I raise as my positions go up to move with the market and force myself to take profits off the table before the market turns against me, (b) am educating myself about cycle analysis, and Elliot Wave theory, which seems to be the minimum required to do your own basic market analysis.
At the end of the day, you can find an analyst trumpeting ANY opinion: “Gold is going to shoot the moon! Buy Gold” or “Gold is overbought, you’d better take your profits while you can.”
And it’s not that most of these people are scamming us; they genuinely believe what they’re saying. It’s just the law of the market: there are always both bulls and bears.
So who does a person believe? I’ve come to the conclusion that (a) if everyone’s saying it, then you’re probably late to the party, and (b) it’s much safer to rely on technicals like cycle analysis and wave theory than to listen to the chorus of Wall Street stories and try to sort through them all.
Dave
Martin Weiss Reply:
January 27th, 2010 at 12:20 PM
Dave, for someone like me who writes and publishes investment newsletters, this is valuable feedback. Thank you! My policy is simple: I do not tell our analysts what to say or write — let alone what to think. What I do require is intellectual honesty. My primary message to them and all of us: (a) Make your judgments based exclusively on independent analysis, regardless of what the crowd may be saying. (b) If you don’t truly believe in an investment, don’t recommend it. And equally important, (c) if you have recommended an investment you no longer believe in, don’t let anything stand in the way of recommending its sale. — Martin
Martin – I am expecting to get those answers from you. I have a financial planner but have joined your group to see if I can do better than my “planner”. I make some decisions within your group but in general follow the recomendations of your staff. I look for what is happening in Asia as I feel their future is more secure than ours currently and have visited the area and have other financial investments – non-profit contributions – there which I have seen to be successfull. Therefore, Asia Stock Alert is my favorite newsletter. Barb
I spend a lot of time reading every thing I can get my hands or eyes on in deciding on what to invest in. I watch my investments every day. Since I am very nervous about the state of the economy, and the amount of debt being generated by the gov. I try and hold some 30-50% of each portfolio in short term treas. money market accounts.
Currently I have decided to invest in agriculture, energy, gold/silver, and MLPs with high dividend yields. I buy a good many out of the money calls. I am a value investor and have no set allocation percentages for the non cash portion of my portfolios.
The current game of “beating forecasted earnings on a quarterly basis” as a criteria to stock gains is about as bad a strategy for most company managment’s as is possible.
This accepted goal has lead to greatly increased cooking of the books.
I am quite skeptical and don’t trust any Gov. data and very little company data.
I am trying to raise capital for a medical treatment technology that can lower patient costs, is safe and has no known negative side effects. Currently it appears that our team has as much chance to find investors for our early stage company as we do of hitting an identified “best value bet in the world” 3 nickel progressive set of slot machines located at one casino in Las Vegas.
I appreciate the advice you and your associates allow me to see and generally agree with your assessment of the state of the economy.
Jim
Right now I rely on my financial adviser for the input I need to structure my portfolio and for advice on when to modify it. He’s good, but even so the more I read the more I realize I need to accumulate the know-how to at least some of the analyses myself. I’d love to say I will get to where I’m good enouh to fly solo, but that would be self deception. The other way is to learn from you guys…
I don`t have answers to your questions. That`s why I`ve employed the Weiss Group to give me the benefit of your knowledge and expertise with recommended buys ,sells, and holds. Thanks!
Having just re-read Judge Ferdinand Percora’s book about the 1929 crash, and seeing that the same manipulators are presently at work even moreso because of the added complication of global players, including ideologues of dangerous persuasions, I’d begin by recruiting a small, tightly knit group of like-minded investors who are aware of these dangers and form a “POOL” to protect ourselves from the other “pools” which are manipulating the markets. It goes without saying that these associates would have to be highly intelligent and mature persons well versed in financial matters.
Today is the time to be very very liquid.
Gold coins (can.maple leaf or US eagles)…held personally 50%
Treasury bills….Canadian…not US…very short maturity..Months only 30%
Golf ETF NY. 10%
Gov. bonds are possible but very short 5%
Some oil companies with dividends when maket weakens or oil drops 5%
If you were asked to create the ideal strategy for building, diversifying and balancing a growth-oriented portfolio, where would you begin?
Your groups sharred insight into the current market conditions and a lot of diversification including solid performers in the US and US firms in other countries and I
What reliable scientific tools would you use to identify the most profitable asset classes moving forward?
Charts and PE ratios and current performace inclidng your firms assessment of each of these tools.
How might you decide how much money to invest in each?
I still believe that diversification is necessary and I would follow the general guidance of your 1MM$CF managed by Vogt.
And how would you know when it was time to CHANGE your portfolio structure to avoid danger or to harness emerging new profit opportunities?
This is the most difficult item, I would look at 200 day performance as indication of when a particular segment of the market or an individual stock is changing and how. The insight from Larry and Claus would be an important part of the input into these decisions.
I would invest equal percentages in the asset classes you mentioned and make monthly contributions the same way and rebalance once a quarter.
There must be someone out there using the latest tools like “fuzzy logic” or neural networking to analyze the markets and external forces to predict the future. The key to the successful use of such tools is insight into which factors to test to determine which factors in our world truly affect markets.
1. First I would decide what sectors I would want in my portfolio, domestic, foreign, stocks, bonds, duration of the bonds and the percentages of weighting to the current economy. I would carry no more than 10 but more likely 8 positions so that I would have time to watch and compare. Move or adjust as necessary.
2. I would use the internet, using independent sites as well as some company sponsored sites. Looking at history of markets and why the reactions at the time.
3. I would try to deciminate the current market in its relationship to markets of the past that had histories of like conditions. Not all down or up markets are there for the same reason. Then, I would weight my positions to the climate of the day from conservative to aggressive and most importantly, take my length of time to retirement or age into consideration. No investment being weighted more than 25% to no lower than 10%.
4. Not to be greedy, I would set a limit of profit as well as loss, say 10 to 15% up and no more than 10% down. Keeping the portfolio within the specs set up on balance of about 5% or so. The highest held postions, depending on age again, would need to be where the market stood, ie bull or bear.
One must always think out of the box just a little most of the time and not follow the leader blindly.
Martin, i read a great percentage of your e-mails and information on your website, but there is so much information on so many subjects, I have a difficult time making up my mind on exactly which path to follow. There is almost too much information. In short, I rarely move money at the pace recommended by you or anyone else. I am too busy trying to run my company and keep it profitable!!
If you were asked to create the ideal strategy for building, diversifying and balancing a growth-oriented portfolio, where would you begin?
I am using FINVIZ.com, METASTOCK11 software, Trending123, Fools Rule Breakers, Fidelity.com Zacks.com and I am too tight up to enjoy this. I hate invest managers that buy and hold loosing more than gaining.
What reliable scientific tools would you use to identify the most profitable asset classes moving forward?
I need help on this. I can use Zacks and Fidelity Number 1 to 5 grades for buy and sell.
How might you decide how much money to invest in each?
I usually do not invest more than $1,000.oo on each to avoid big loosers such as today PFBC -7.23% and ETRM with -6.06% or more
And how would you know when it was time to CHANGE your portfolio structure to avoid danger or to harness emerging new profit opportunities?
I do not know. last week I lost over $10,000.oo bucks for not knowing that millionaries were going to crash the Market for 3 days. How can I know when to sell with those people?
Today they are buying APPLE raising it 3.42% and DJIA ro raise it o.55%
Shawn Tully, NEW YORK (Fortune) says, “Here we go again.” and this is what he has to say,
“Investors are rushing to gold, because they rightly fear far higher inflation in the next couple of years and want to hedge against both rising prices and a declining dollar with a commodity that, they claim, has a fixed supply.
Since early 2009, the price has jumped to $1,100 an ounce from $875, triple its average price between 1990 and 2004. Yet the supply of gold is far more fluid than the gold bugs admit, partly because mining companies are investing heavily to increase production.
The real threat: Prices are so high all over the world that people who once treasured their gold jewelry are now rushing to sell it. Swiss refiners are offering irresistible prices for bracelets and brooches, “cash-for-gold” stores are in Chicago malls, and suburbanites are hosting Tupperware-style parties where neighbors show up to hock their gold teeth.
When this happened in the early 1980s with silver, prices plummeted from $50 to $15 in less than a year. Look for gold to end up below $500 an ounce within two years.”
My personal response would be… Yes, Tully, but there are likely different underlying forces at work than in the ’80’s. Gold will possibly hold support and re-ignite its move to the upside after some corrections. Or will it?
When we read these articles how will we insulate ourselves from moves against our bullish gold position. Martin’s “crew” are advocates of using stops at the right places to avoid heavy losses, so correct stops in gold positions must be the answer.
Any comments on a possible bubble in gold, Martin or Larry?
Thank you!
To create the ideal strategy you need to do one thing first – figure out what that is. Depending on your age and circumstances it can change dramatically. To me it means a combination of US and foreign indexed mutual funds that cover the majority of each market – this would be about 60% of total. Then approximately 10% gold or gold funds and 30% fixed (ie. short term index bond funds). I think indexed is the way to diversify. I use funds with no more that 0.5% fees.
With the current mess I am very defensive with about 85% in fixed assets. Have some gold and commodity funds for the other 15%.
All I can say regarding how to figure this out is that you need to read, read, read and pay attention to the people whose advice has been correct in the past – like this website. There are many other intelligent (John Mauldin for one) who are generously willing to share their knowledge and expertise. The information is out there, you just have to dig. When you do this, you get a much better feel for when the time to change directions is upon you.
One last piece of advice – don’t be greedy, go slow and steady and let the miracle of compounding work for you.
Wall street is based only on speculation working for themselves not for the investors. This has been factual at least for the last hundred years. If you want to invest do it yourself. Check the history for every investment at least for the last 10 years. Look for dividends long range and overall performance like expenses to earning ratios. Secure for ever is nothing !
This is the most difficult time to know exactly how to invest and in what. I have paid attention to your recommendations in the past year, and also use Richard Young’s Intelligence Report. I believe the natural resources sector , fixed income like short-term bonds and gold/silver are a good way to invest—plus lots of cash!!!! We are not certain of what lies beyond the next turn in the road and we do not want to be blind-sided like we were in 2008. Thank you for your continued care of your readers. I started reading you about 10 years ago, but just recently got reaquainted.
Investor’s Business Daily & companion Daily Graphs provide answers to all your questions on GROWTH stocks.
martin i have my money invested in energy natural resource stocks+gold i think you are a great person have a great day bob
I think a little common sense has to come into play when investing in stocks. You have to read the news, and events going on now and decide what investments are going to make it and which are not. I’m taking it carefully by limiting stocks to small amounts and not buying high priced stocks or at the high end of their cycle. I’m afraid we’ll have another catastrophe because things haven’t changed much since the last debacle. I’ve bought stocks at their low end and even saw them drop from that, so I buy only stocks that pay a healthy dividend because a lot of waiting may be involved.
Martin Weiss Reply:
January 27th, 2010 at 12:20 PM
Sounds very reasonable, Joe! Indeed, the main thing that has changed substantially since 2008 has been fiscal and monetary policy. Before, it was simulative. Now it is many times MORE simulative — far beyond the bounds of anything we’ve seen in history before. — Martin
I will invest 60% in precious metal,20% in energy,& 20% in foriegn markets.
Preamble: I began trading again with the Millionaire portfolio after a disastrous foray into the market in the early 2000’s; then grew fearful of the turn that has finally happened, so I sold most of the portfolio in November/December and missed the end of year profits made there. At present, I’m trading only inverse ETFs. Because the downturn has happened, I’ve made back some of the money lost.
Question 1 – I have most of my wealth in a Swiss annuity and physical gold, and for now, short term T-bills in Treasury Direct, automatically reinvested. I changed to a Weiss-rated A bank for daily money needs.
Question 2 – I have a relatively small amount invested in the market, where at the moment I’m trading mostly inverse ETFs. I’m trading in blocks of 100.
Question 3 – I know almost all the professionals haven’t got a clue, based on their methodology and herd behavior. ALL popular strategies use the past to predict the future. That’s like trying to drive a car by use of the rear view mirror only. You’ll crash, for sure.
Question 4 – I have a chart of the 1929-1932 crash posted over my computer screen. You can overlay the current chart on top of it and it’s not a close match, but an exact match. “Those who don’t learn from the past are doomed to repeat it.” We have completed the 50% bounce from the top in October 08 and the drop to today. We’ll get a rebound of a couple of months, then a severe drop to the March 2009 bottom. This is what 1929 looked like. I’m not just looking backward, I’m using elliott wave theory and socionomics to look forward. In the very short term, I check the charts from around the world, and find the US following their general trends closely enough to fairly accurately predict the day’s moves.
This crash isn’t a recession, it’s the biggest depression since the 1700’s. We’re in a worldwide event that will eventually see the decline of the US as the premiere world power as it increases socialism, and the rise of China as it embraces capitalism. Before the far east realizes its preeminence, they’ll fall with the rest of the world into depression. These changes are taking place over decades; market moves on a personal scale will have many ups and downs which take lots of intelligence to predict. For this reason, I have been hesitant to follow the lead of those who predict wonderful profits from investing there. I’m not smart enough to deny your experts, but neither am I dumb enough to jump into a pool which is rapidly draining water.
I will know when it’s time to change my bearish stance when the world believes that there is no tomorrow, we’re all going to hell in a handbasket. “The Ultimate Depression Survival Guide” will help me see it. Between now and then, I’ll keep my eye on the charts, listen to your advice, and follow it when you acknowledge that the bounce is over and we’re into the downturn for real.
1. Decide what percent to put into Cash, CDs, Bonds, Bullion, and ETFs.
2. For ETFs, pick only those that will reasonably hedge against the dollar (inflation and devaluation).
3. Choose only ETFs that showed positive return (growth + dividends) prior to the ‘crash’.
4. Choose only ETFs that have well recovered from the crash and resumed their positive return.
5. Build an Excel program that will rank a selection of ETFs of the same sector, evaluating 5 or 6 factors such as Market Cap, Tracking Error, Number of Equities Held, NAV Price Yield (a few months’ period), Dividend Yield, and NAV Price Volatility. This program should automatically produce buy/sell amounts for an ETF selection, given a total ‘buy’ or ’sell.’ (I am now in version-2 of such a simple program.)
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010? :
I would like to thank you first for not being one of the “so Called” expert of wall street. If they they were so good how come I lost 50% of my retirement assets in funds chosen by them? They are just as stupid I am.
Back to your question 1— 25% each.
Question 2 I don’t have any on the curreny because I am sure which one.
I hope that I am not vulnerable. I belong to the Million Dollar Contraian service and how that it will make me money. I am a novice at this and am trying to learn from the information you send. Sometimes it is hard for me because I know what options are, but I am not comfortable using them. Suggestions on how to learn without losing my shirt would be ideal.
And I agree that the paid professionals don’t have a clue.
I am not saying I am better or worse than anyone but this is my view now.
STRATEGY:Concentrate on low PE ratio stocks in top rated companies – that in itself should ensure no great loss if there is to be a major correction following bad news, or a sudden unexpected crisis – for example Claus’s choice of AAN has a PE ratio of 39 – I think this is too high.
SCIENTIFIC TOOLS; I paid $3,000 for my software tools: I subscribe to National Data.
Use software which can enable you to select Growth, Earnings short earn and longer term( profit is after all the first goal of every business), one year high and one year low, and a historical moving 10 year chart which gives you an idea of when to buy and when to sell – many stocks are seasonal, and you buy in Jan and sell in July or whatever, average volume – you don’t want to trade low volume stocks, volatility, and the extremes, averages, spreads, risk , profit to risk etc. The information you mix can be viewed in a number of different ways to help you decide. Oh and buy as many monitors as you can fit onto your desk. The more different ways you can simultaneously watch things the better your decision.
HOW MUCH to INVEST?
I am going to stick to no more than 5% in each stock. My broker wanted me to always trade in large chunks, but now I have an Internet account, I can do as I please. I am splitting the account into two blocks and play off the success of one against the other so I am competing with myself on two strategies – say l/t growth v. s/t growth, or income versus capital gain.
When do you change your strategy?
There are bucket loads of gurus out there, every web page has its view, Yahoo, Bloomburg, the exchanges, the brokers, and people like Marin Weiss and his team. God gave us all a brain. Look, read, look out for speciality magazines, don’t read newspapers, by the time they get hold of it its ancient history. Think about it, If you can’t work out the next wave, you shouldn’t be in speculative investing! Oh and steer clear of those cheap bucks p.a. tipsters – they are bound to sell you a tip at the top of the wave, unless of course its a new (tipster) boy in town, and then you might just get good value for money!
I confess I like the web chat between the “experts” The meeting of minds even if I can’t join in – is quite stimulating. I call my broker occasionally too to debate ideas.
A lot of the precious resources are oversubscribed and it is time to look for new NOW.
Martin Weiss Reply:
January 27th, 2010 at 12:22 PM
David, your key phrase I’d like to comment on is “God gave us all a brain.” Amen! As investment analysts and publishers, we are dedicated to giving you the very best information we possibly can. But ultimately, it’s up to you to make your own choices based on your own awareness, personal goals and tolerance for risk. You are empowered to make the final decisions regarding how much to invest, where and when. Use that power to your best advantage. And always remember: Investing itself is a choice. You don’t have to do it if you don’t want to. Keeping most of your powder dry and waiting for future emergencies or opportunities is always a valid option. — Martin
I am comfortable where I am now: Nearing age 80 and not shooting for the Moon. I can currently live on my SS and pension incomeand fear inflation most. My current positions are:
Cash 57% Treasury MM,Au &Ag, 18%,Stocks 25%
The stocks are: Energy(oil,gas ,solar) 43%:China 22%;Intl. x china 11%;Agri. 11%;
Health 7%; Base metals 3%; Misc. 3%.
I like my stock distribution and as conditions improve will reduce Cash to a minimum of 30% and will buy stocks, gold, and Treasury bonds at rates >inflation.
It seems to me that there are two separate things required for intelligent decision making: First is a method to determine in which direction a particular market is headed. Second is a way to find particular issues that will do well in the market, in the direction it is headed.
I have come to rely on Elliott Wave analysis to determine market direction. They have been right more than they have been wrong and offer understandable reasoning for their conclusions.
For individual purchases, I rely on your people, as well as a Merrill Lynch Broker, providing they agree with EW, which they sometimes do not. I look for good reasons to buy a particular issue, not just because it’s in one sector or another.
So far, this approach has kept me from losing money, and making some here and there. Keep in mind that when I was listening to brokers and going on “gut feel” I lost a great deal in 2008/2009 like everyone else. I do not intend to do that again.
I most definitely do not subscribe to “buy & hold”. Those days, if they ever existed, are gone. I use the stock market, including ETF’s to invest in stocks, currencies and commodities. I don’t do real estate, bonds, futures or anything like that. One day maybe, but not now.
Martin,
I take your recommendations and that of others and back test them on Vector Vest using differnt spans of time. For each span of time Vector Vest will rank the stock recommendations using various strategies. I buy only stocks that rank the highest over several time periods. The most popular ranking is by VST which values each stock by Value, Safety and Timing. High VST stocks nearly always produce short term winners and sometimes long range winners that survive a rapidly changing environment.
Dear Martin, I’m suprised that you are suprised at the broad range of intelligent “novices” that make up you’re clientele. I have a constructive suggestion on an approach that might help you minimize the chaos. 1) My feeling is that there is too much input from too many sources. I am a “lifetime member” which is great, but, perhaps you or someone can screen and cut the volume of input we are recievng.
2) Most important, ask each of your contributors to create their own “ideal” perportioned complete portfolio, each based on 100%, and devided according to same. This is passed onto your customers to let them decide what to choose and when. The Grid would be updated and modified by the creators and updated as well. The idea is to give your clients a yardstick on the percentage of pick “type” in each catagory. This should go a long way to cut the random approaches now taken. I wish Larry, Sean & Tony each created such a matrix. It would certainly help “ground me.”
I want to thank all the people at Weiss for “being there” for all of us.
God Bless, A. Montalbano
Am a survivalist and investment strategy depends on how bad one thinks things are going to get and what your mobility capabilities are, which of course depends on how much money you have. First for people who can’t “run” I begin with Howard Ruff’s (of the seventies Rough Times) strategy of Guns,Grub and Gold (this includes a place of security preferably away from large population concentrations). After those preperations are made (they don’t have to be elaborate), then my best guess is conservative investments of diversity and stay out of the stock market unless you really know what you are doing. Mr. Weiss’s comments are excellent;however, I just don’t trust foreign countries, probably from my lack of knowledge of same. AL
Martin,
I am single retired lady and I need all the help I can get. (As I recall, you continue to say “hold the cash.”) I have some cash on the sidelines and have invested in gold bullion and silver ETF’s and have a small account with Weiss Capital Mgmt. I, too, want to take advantage of the BRIC countries, but rely on you and your professional staff.
I think the ideal growth portfolio, for me, would be to have 60% in solid and stable growth funds—30% above average risk and 10% in higher risk. I consider you and your professional staff to be my scientific tools. As for rebalancing or restructuring my portfolio, I would be watching closely those funds in the 40% range based upon worldly news and other events that could impact each one of them.
Martin, I hope and pray that you will help us to profit through these very trying times.
I am going to tell you how I have done the things asked about in your latest questions. I have attempted to go online at ETrade and find some reseach analyst who has an opinion about these matters only to be very frustrated at 1) the lack of information and 2) the inability to identify whether this is really research or simply someone out there shooting from the hip.
Now I am looking to you Larry E. for advise in his Real Wealth Report and am trying hard to follow his advice. So far, so good. I’ve only been with him about five months and this has been an up year for the markets, So not loosing money may have been easier this year than in recent past years.
I like the way he explains his thinking and I am glad to have someone I trust to advise on how to proportion my portfolio and suggestions for good companies and ETFs to buy.
I use several sources for information. Yours, Porter Stansbury, IBD, and good old fashion common sense. I watch my positions daily and have trailing stops in place. I use Dr. Van Tharps R value to determine my position size and trailing stops. I keep my losses as close to 1 R as possable and let my winners run until they take out my traililn stops which I adjust as needed to protect my gains.
Do as Peter Lynch did in the ’70’s and ’80’s only now in the emerging markets.
Peter
It’s just a matter of time until the broke governments try to follow the money into the gold sector and try to capitilize on dollars with increased environmental fines, fee’s, new taxes, etc. America requires the mine closing costs up front…Australia is developing a 40% tax…Locals in Nevada are complaining that mining companies are taking the wealth of their state and should pay more! Environmental issues are surfacing in South America…Identify the mining friendly countries and keep in flux because the world is changing! Just a warning for intelligent investors!
My lst concern would be the market climate for 6-mos, 12-mos, and 18-mos. My belief is that the next 6 mos will be basically flat, but forever leaning to the downside. The 6-12 mos run should often be down, but dependent upon the Nov elections: Senate/House control unchanged, then continued down; splitting the two will favor flat to an uptrend. Both houses change and the bulls will amok. The 18-mos interval is too cloudy and depends too much upon the election.
Long term investment strategy is necessarily short term targets. Business sectors will decide who wins and who loses. Finance has too many storms in the forecast. Energy may be a safer bet. Medical is reasonable, but must await healthcare’s final outcome.
Building will be weak. Defense equally weak. Gold, silver, certain other commodities, completely safe. On and on.
My “long term” solution, therefore, is to hold 50% cash as a minimum. Put 20% into gold and silver and 10% into some other commodity (copper ?) yet to be determined. Delve deeply into energy stocks with the remaining 20% in search of the solid citizens that are out there (avoiding those that are the hyped super-greats of 2010 and will not perform until 2012). These should survive into November and the game plan can then be reexamined as needed. I cannot envision one-dollar that I would place today and feel comfortable that it will serve me throughout 2011.
After saving for a rainy day and a beginners study of geopolitics; who has food, who has all of the commodies we need in life an individual or company should be able to make educated decisions on trends; drought that would change the supply of wheat or rice, internal strife in oil producing countries that would slow production, who is borrowing/lending etc, etc
regards,
george
The ideal portfolio is the one that a person can be comfortable with and lets you sleep at night.
Figure out what your basic plan will be, how much risk you can handle and then educate yourself accordingly.
The only reliable tool you have is between your ears, use it to your best advantage.
Double check the reliability of your broker/s and insist on performance for the commissions you are paying them.
Never hold on to a loser, dump it and move on.
Keep a bit in physical silver/gold/cash/emergency supplies.
If you were asked to create the ideal strategy for building, diversifying and balancing a growth-oriented portfolio, where would you begin?
In the 1960’s there was a fund manager named Jerry Tsai who started a mutual fund named “The Manhattan Fund.” His first purchase was AT&T (that was then). More recently Peter Lynch said when he bought a stock he planned to hold it 3-5 years. How you define a “growth-oriented portfolio” isn’t clear to me.
What reliable scientific tools would you use to identify the most profitable asset classes moving forward?
P/E, E, P, R&D results, macro expectations, history, Rothbard theory, etc.
How might you decide how much money to invest in each?
In the beginning it would be 50/50 based on cost.
And how would you know when it was time to CHANGE your portfolio structure to avoid danger or to harness emerging new profit opportunities?
When my fingernails got down to the quick.
Ive found its best for me to continue to invest in coin collectibles. the rise in both gold and silver over 1 year is crazy. Im just tired of moving backwards in investments
Even my Roth IRA does not appeal to me now, at age 67. Its unbelievable the returns
Ive witnessed in collectible coins , in 2 years. Love your articles you send to me
wall street has pulled the wool over many people,but before the end of 2010 we will be in what many people believe is a depression.
First, invest 20% in the one area providing solid, if volatile, 20% returns for the last several years…actual solid metal bullion, perhaps as much as half in gold but definitely Silver, since that is the metal most manipulated to the down-side on price by the massive naked-short positions held by JPMorgan and other market-makers at the moment.
2nd – Put another 20% in interest-rate-following MM fund like Weiss or perhaps a portion in 3-month CD’s rotating to whichever currency providing the best return.
3rd – Diversify stock holdings by using funds that can be traded at any time, which means proshares/rydex and ETF’s.
So, big question, which sectors, when, and what to use for factual decision making to avoid the ‘gut’ emotional action that dumped so many out of their positions last October, only to sit out the rebound.
I would prefer an easy-to-use online tool that tracked all such funds by their closing price, then calculated and ranked them by Beta (only need those with positive momentum) and Alpha (looking for the best of the bunch) against a chosen market indicator, such as the S&P 500.
Then make sure that you drop any that drop out of the top of such a ranking, and move that same money ‘in’ to whichever ETF’s/funds have moved the most up into the top. It would help if any likely candidates were shown as in positive trend upward slope both in price and RSI, preferably still in ‘oversold’ but climbing.
Unfortunately, that kind of simple ranking tool by Alpha for all ETF’s is not available free on Yahoo.
Knowledge is the best tool you can have. Read and learn use newsletters, Barrons, WSJ and any financial paper you can. Get a feel for the market. I personally do not buy bonds, but like stocks on a short term basis and dabble a bit in options. Years ago, you could buy and hold stocks but the market has changed. In so far as how much to put where…divide your funds into 4 or 5 parts and determine what your risk level is. Make your choices based on information you have gathered. Do your research on the stock or option. Understand the numbers. I buy what I know. I also watch the advertising on companies. Usually when a company is advertising, they have something good going on which makes me look at the financials. When I buy a stock, I already know how much I want to make on that stock and set a price in my mind. You can use a percentage or set a price. Don’t be greedy. There is always another stock to buy and money to make.
Thios is just my opinion. Still more to learn.
This is a period of active management with portfolios, not passive. One very important lesson that I have learned over my 38 years in the investment profession is that you cannot change human behavior. Throughout history humans have been programed to react to similar situations in similar ways. Look back in history to 1937-40, and 1973-76, and you will find that the news during the two periods mentioned wasn’t too different than the news is that you are reading today, and the remarkable thing is that if you go to the library and look up articles on how congress was dealing with the events in 1937-40 vs. today you will come to the conclusion that they were just as clueless back then. One area that I never see mentioned is demographics. Now that the baby boomers have grown up, (the youngest is now 45 years old), the need for “things” is no longer on their minds. So who is going to be the consumers that our government is attemping to create through the stimulis program? The birth rate in the US after the baby boom was much lower so what is happening is that not only is our economy in a funk, but even if the government continues to stimulate there aren’t enough people born between 1966 and 1981 to make up for the lost baby boomers when it comes to consumption. Also, the average age of the population of China, India, Indonesia, and other emerging countries is quite a bit lower than it is here in the United States and in Europe, where the economies seem to be having the most difficulty recovering.
Gold and other precious metals 25%
Defense 15%
Natural Resourses 15%
Water Resourses 15%
Australian and Canadain Dollar 15%
Short Term US Treasury Bonds 10% only because I have to.
Rick
I am convinced that you must have a system for investing. For me, it is Elliott Wave Theory. This system has rarely failed me. The theory is telling me to be 100 per cent short at this time.
I evaluate Market momentum–then I check several analysts- then I check out the stability & merits of each stock & bond that I select— then I look for the level of dividend before I make a final selection. At the current moment I usually put an equal amount of dollars in each investment except for gold & silver. In the latter two I put 2 or 3 times as much because of the current economic situation. I also look at special situations recommended and if I agree with the analyst I put a smaller amount as a feeler. I don’t feel comfortable with put & call options but am trying the Resource Trader to see if it will be profitable.
If there was a scientific way, wouldn’t everyone be rich….everyone doing the same thing? Even your investor advisors have different means of determining how to proceed. It is very disheartening for someone who is trying to learn to how be a prudent investor. Too much emotion involved….globalism has made matters more complicated…..and too much government interference with the markets. We own gold, real estate, natural resource stocks, have cash, and follow the contrarian portfolio as well. Other than to be diversified, who has the answer? I’m waiting. Frustrated in the Midwest.
I am convinced that you must have a system for investing. For me, it is Elliott Wave Theory. This system has rarely failed me. The theory is telling me to be 100 per cent short at this time. I only use the domestic stock indexes as my vehicle.
If I had a million pounds. First I would remember my Dads good advice Buy low and sell high and 2. Do not put all your eggs in one basket.
I would develope this to buy high yeilding stocks which have good potential EG Man group and Chesnara perhaps a investmnet trust such as Merchants trust and RIT capital Some speculative shares such as Altona Energy Maybe some High yeilding bonds such as Tesco. I would probably not seek specialist advice but try to only make my own mistakes . john
Martin,
Since I am retired I balance my portfolio 50% equities and 50% fixed income. I use a brokerage firm to help with asset allocation between U.S. and Foreign stocks and between commodities and different sectors of the market. I use information from your staff and other financial internet sites to glean information that are affecting my investments, to obtain investment ideas, make investments after appropirately researching stocks/mutual funds, and to beable to have in intelligent and questioning conversation with my brokerage firm advisor.
Rick
Being a recent graduate from business shool, I have many opinions about the best methods for deciding how to allocate funds across a portfolio to maximize profits while diversifing away as much risk as possible. However, there are two fundamental rules even the most neophite invester should know: 1.) Never invest money that you cannot afford to lose, and 2.) Risk is corellated to rewards. The average invester needs to be aware of their personal level of aversion to risk before reasonable expectation for reward can be established. If you do not know your personal risk aversion levels or how to read and understand financial statements, you probably shouldn’t be investing in the first place. Linear regression, trend modeling, and vector calculus are the three best tools in my investing arsenal. All three are excellent for using historic data for real time decisions.
I am trying to become educated in investing. My 401k has a fixed set of Vanguard fund in which I can invest. That leaves me with Roth and non-retirement money to invest. I am reading this, and other investment advisers as well as examining the results of their advice before I move.
Well– I tend to invest in things that come out of the ground (or are in it). Getting into paper companies that had 14 million acres of trees proved a disappointment–they went to nothing! I am a small investor in the market: I have two companies developing mines–one cobalt and one gold and silver–been with them since about inception, they are both beginning to move dirt. I am into pipe-lines–they pay nice dividends and will always be needed. Oil developing and production with a toe hold in the Baaken discovery. I tell my broker “IF you try to give me advice I will fire you–just buy what I order!” I missed some real money on several occasions by emotional brokers–no more.
I have irrigated land, mineral-oil rights on land in interesting areas, I have a bit of gold and silver. I think right now silver rounds are a fine investment. CDs looked kinda sad for a while but reading about the Euro, the Yen and Pound makes me feel better about semi liquid cash. It ain’t good but at least it isn’t as bad as some of the others.
Been reading your reports kinda hit and miss–I’m a cheap skate–I feel guilty enought to figure I should pay you some money though I started when your outfit sent out a circular on Colorado, Utah and Wyoming oil going to make every one rich!! Fortunately I didn’t get in. I don’t know who got all those trees from the paper company but I sure didn’t get any. Finally I am 80 years old so I don’t really go into long term planning!
I have turned to both you, Martin, and to Larry Edelson for advice and answers about what to invest in for the past couple years. Have subscribed to both your newsletters and listened to most webinars. I believe the “Foundation for the Study of Cycles” is a brilliant addition to the scientific foundation of your investment strategy because I’ve been studying Feng Shui cycles for 20 years and the information is very similar.
I’m STUCK right now! Jan. “Real Wealth Report”, Larry’s advice seems to be BUY-BUY-BUY and ignore this last big downturn. But Martin’s flash alert last week says exact oppposite–to reduce holdings to a bare minimum. I need clarity between Larry’s view and recos and Martin’s view and recos because I respect you both and have benefited from BOTH of your perspectives. Would you please clarify the difference between your two opposing views and recommendations for the immediate future in Wednesday’s webinar? I feel I can’t make a move without more clarity from BOTH of you!
Thank you.
I have not answered your previous requests as I felt they didn’t apply to me. At this time I have to invest for dividends and not for what may happen tomorrow. When we sold our home, I felt that if we earned 5% on our funds, we could survive OK. As it has turned out, that did not happen and now I have to look for dividends to make up the difference. Unless I find otherwise, I believe that I am limited to US and Canadian stock. Any help along these lines would be very helpful.
Actually, I believe that most investment models are basically flawed. They bet on the same horse whether it is a fast, or is a muddy track. I have modeled a new theory that you are in a perfect position to implement. I’ve never seen this anywhere. I don’t have the resources to actually implement the theory, but would like to see someone give it a try. It is a simple theory, but more than I have the time to explain now. I will share the idea with you as I have the time to tell the story.
Martin, you are absolutely right about all of this, but I am convinced that the market is being so savagely manipulated that nothing either of us does will result in logical, scientific trading. I still play a very few las Vegas games with the market, but it is just for fun — like bingo. I have a little precious metals, a little real estate that I want no matter what the market does, a little cash, paid up insurance, retirement arrangements, and the rest I play with. I don’t have any faith in any of it, but what else can anyone do? I stay active in church, politics, service clubs, and could make a big garden if I had to. Slowly the pressure builds. Like in the French Revolution Period, Mrs. LaFarge is knitting, and I kid my friends that the guillotine wasn’t all bad. Undoubtedly it solved a lot of problems. I have a lot of respect for Obama and Paul Volcker, but the rest of them make me want to vomit. Are we doomed? I just don’t know. I loved Eisenhower and didn’t feel too bad toward Nixon, but sad as I am to say it, Reagan, Bush I and Bush II administrations with their crazy fellow travelers have destroyed the world I grew up in. The lunatics have taken over the asylum, and there doesn’t seem to be much that anyone sensible can d o about it. By the way, I also don’t believe that fear and greed are the primary market motivators. Most people just want a safe place to put their money where it will pay a reasonable return and support the nation’s businesses. They want to be responsible citizens and prepare for life’s inevitable needs such as the health and education needs of their families, retirement, and be able to afford reasonable comfort. Then the Republicans introduced the first trillion dollar deficits, the savings and loan crisis, a poorly conceived war, and then started telling everybody to borrow all the money they can and go shopping. Deficits don’t matter. Then, the churches traded in Religion, morals, and ethics and became political clubs. This is not just an economic crisis. Man dies not live by bread alone, and the lust for money can be the root of all evil. So, where do we go from here?
Has anyone suggested the Elliott Wave Theory, Socionomist, Therorist, (short term forcast Mon Wed Fri) vs shooting from the hip
Here is how people make decisions–
Find this article at:
http://www.usatoday.com/tech/science/columnist/vergano/2010-01-22-psychology-political-propoganda_N.htm?csp=Tech
IN summary:
Unconscious biases based on experience, propaganda and advertising NOT REASON. Read Bernays’ book “Propaganda” and his founding of Marketing which can be a very good thing as he did in WWII to help our people unite and make the great sacrifices for good. Too bad Obama doesn’t get it.
I have a set amount I invest in each stock. I am in retirement and only buy income stocks or mutual funds that hold bonds. I watch my portfolio every day and if one sector starts to tank I get out. I have done this for over 20 years and it seems to work.
10% GOLD 80% GOLD STOCKS 10% OIL
I HAVE COMMITTED OVER 90% OF PORTFOLIO TO GOLD AND GOLD STOCKS. LATELY I’VE TAKEN A BEATING ON GOLD STOCKS, BUT KEEP FOLLOWING LARRY’S ADVISE ABOUT GOLD.
I would depend on either you or Larry Edleman to make them decisions if you had a reasonably priced service
Question #1 I get information from News papers, online sources, your web information, Bloomburg.com, Cnn money, and other web sites like these. I look at what the current economic situation is based on my background in economics and try to make the best possible decisions. I appreciate your information and current events about current economic decisions being made. Your news letters are usually first with the information. I have made several investment decisions based on that information especially after the market decline we saw last year. Economically I agree with almost all the information that I have read from all the various news letters.
Question #2 I have divided up my portfolio based on my own analysis of what may appreciate the most in the future. I use the same information stated in my answer of question 1 to make those decisions. It would be nice to see the future but no one can predict exactly what will happen and when. I try to diversify at least 7+ ways so that no one investment will cause a major loss to what we have. This is also Biblical.
Good Day Martin
You recomend some Gold in our portfollio.
I have a question about this broker that sell opiton to buy 97000 dollars of gold for 38000 dollars of which 15percent is his commission. At 75.00 dollars per oz increase in price you brake even, at 1300 per oz you make about 92000 dollars. There are no other fees ever, unless you want to buy more options. For 5 years and you can trade in prious metals with out any further fees.
The name of the Broker is ‘Vault metals’ and bank that hols the metal is ‘Worth metals’
Jake Loepp
My investment strategy is simple with no rocket science applied.
:”" PIGS GO TO SLAUGHTER AND LOSSES ARE INTOLERABLE FULL STOP”"
A LONG OR SHORT POSITION CANNOT BE OPEN WITHOUT A TRAILING STOP LOSS OF 2.5% CLOSURE IS TRIGGERED AUTOMATICALY OF THE POSITION THEN NEXT POSITION OPENED ON 3% SO YOUR LONG THEN SHORT
85% OF PORTFOLIO BLUE CHIP THAT HAVE TRADING RANGES OF 10% PLUS ABOVE AND BELOW THEE MEAN AVERAGE TREND LINE EVERY MONTH.
ANECTDOTAL EVIDENCE OF min 2.5% fully franked dividends for previouse 3 years
ENTRY PRICE MUST BE 25% BELOW RATIFIED NTA
MUST BE AN ATTRACTIVE M AND A TARGET SUPPORTED BY AVAILABE CAPABLE SUITORS
POSITIONS MUST BE 100% LIQUID TO ALLOW FREE RANGING ANYTIME REQUIRED ON TRIGGER ACTIVATION OF TOTAL POSITION
NO INDIVIDUAL STOCK HOLDINGS EXCEEDING 10% OF TOTAL INVESTED securities CAPITAL
that is what I am paying you for. You and your cohorts are what I am following interspersed with a couple of short etf’s that you originally recommended but no longer do. Why I don’t know-SRS and TZA should be going up big time -Why not?
I base my decisions on Larrys Real Wealth Report, other pubs from your organization, and another letter. Zeal Intelligence.
Martin,
Such difficult questions for such a small space to respond. Question #1. I have 35 years of investment experience. I have a financial advisor. As for what to invest in (Stocks, Gold, Commodities, Currencies or Bonds) I TRY TO EVALUATE prospects for each. For example, I believe we are in a cyclical Bear Market for Stocks (Thus I try to ride the Bull rallies in each then go to 100% cash). I believe the US Dollar will surprise many on a strong rally in 2010, hence no more GOLD and GOLD stocks until Gold is $950 to $1045 an oz. I believe interest rates will stay low for most of 2010 so Bonds will do OK for 6-10 months. Need to be nimble to get out fast at any sign of increased rates by the Fed. The economy will be worse than most expect in 2010 and 2011.
How do I know how much to invest in each? I am retired so I try to manage risk knowing that I cannot afford to risk a great deal of my portfolio in risky asset classes. Unfortunately Stocks, Gold, Commodities and Bonds are all very risky. More risk than a 60 year old should have. So I managed a MetLife 6% Fixed Annuity for 7 years that is insured by a state agency. I have a GNMA bond that pays 5% and is guaranteed by the full faith of the USA to repay principal and interest. I have stock 401K accounts that I manage to move money to money markets (I am 95% cash as on November 2009) when I feel the risk is too great. Yes I miss some of the good moves in the market but I also missed all of the 2008 downturn. Most of my 401k’s are at the highest levels they have ever been at although only modestly. I have one exception where I have a variable annuity 401k that is down about 20% from the all time high but there is a guarantee provision in the contract that guarantees me 7% per year for seven years. So there is some insurance there when the contract matures in 2012.
I spend more time managing my portfolio than I want to, but I feel it is necessary. I search out advise and do the best I can. Somehow I feel I have been relatively successful so I continue to do the best that I can. I am surely better off with what I have been doing than most of my friends and peers.
These are dangerous times we live in. It’s not like it use to be in the 1980’s and 1990’s. One has to take responsibility for managing risk in their lives. Believe me I try very hard to measure risk and reward and act accordingly. If I am wrong I have only myself to blame.
I HAVE TAKEN YOUR ADVICE AND STAYED AWAY FROM VOLATILE STOCKS AND STAYED WITH COMMODITIES.
Reliable scientific tools?????? Martin, where are you living?
All it needs is for the wires to report an Israeli air strike on key Iranian economic infrastructure installations, and every “reliable scientific tool” ever devised will be utterly worthless as a guide to investment action.
And please don’t tell me that “one HAS to proceed as though nothing unexpected (like an Israeli strike on Iran) will ever happen.”
That approach is no better than keeping one’s head deep down in the sand.
It’s akin to not resigning one’s futile position as Chairman of the Strong Dollar Committee (or whatever it’s called).
After all, you know as well as anyone that, relative to assets with intrinsic worth, the USD will almost certainly never be “strong” again. Indeed, it will probably be replaced with something with another name.
“Reliable scientific tools?” Come on!!!
Dear Martin,
I want 100% of my money invested in areas I think are going to be in demand. The Chinese need raw materials, energy, water and perhaps gold as an inflation hedge. We also need energy & water, but not plasma TV’s. I will change my ideas when the world is fully supplied with energy.
I would start to decide on global areas of higher growth , and if that growth is discounted in the stock prices; then decide what sectors are probably the most profitable , sustained growth.
Tools I would like to use are : p/e ratios, sentiment data, M-2 money supply, but I don’t know where to find these data without paying a lot.
The amount of money I would invest in each sector/area depends on risk assessment, volatility, predictability, inflation and future product demand
I don’t have a clue how to determine when to change my portfolio except perhaps using Claus as a counterindicator….
Martin , I would like to know how to get to your blog in the future. Thanks.
Herbert
Thanks for the persistent good work; put your page on my blogroll. And will regularly feature relevant articles in my post.
What’s wrong with Economics?
You have the government embedded with the banksters . The head of the federal reserve is more powerful than the president . These people manipulate markets up and down. It is like playing against the house , but the house cheats ! Suppose you have a nice gain in the market . By the time you pay capitol gains tax , and consider currency devaluation from the time you entered the market , oh , and add in risk … you have to ask yourself if it is worth it . We live in a bubble economy . Time magazine’s Man of the Year has contributed to that . Financial advisors have very little training . They are salesmen . They CERTAINLY are NOT economists from the Austrian school .You were right when you said that the majority of them don’t understand how to value the Dow in relation to an ounce of gold . Mine was clueless when we had a meaningful discussion . I fired him .
Martin,
I get information from my investment broker, and I recently got on board with your eilte group to assist me with the process. I am not a professional, so I depend on the advise of others for investment advise. I have also came to realize that long term investing is only as good as my interest and involvement in watching the markets and being actively involved with my portfolio. At this time I am extremely cautious, my beginning goal is to have 25% in precious medals, a gold/silver fund out of Canada; 25% in a mutual fund invested in China; and 50% in a cash/3 month treasuries fund. The cash reserve is there for a buffer and also for “deals” when stocks go down. I research what is happening around the world via the web for newspaper articles outside of the USA. I look for confirmation of growth, economic indicators and general financial news. Another good source of economic information used is individual company financial documents. I check the web sites of the top ten companies in a mutual fund before I invest. At the advise of my broker, I shy away from countries with weak currencies, high debt, or volatile political areas. I have read that you should take losses at 8% or less. I intend to rely on Weiss Research for more information on exiting in the future, so I exit with gains and not losses. In the past my broker had a balanced portfolio set up for me that was diversified over several countries with strong currencies/economies, and several asset classes. I agree with this method, provided the portfolio is watched closely so to exit in time, especially with individual stocks. I lost a lot of money because I wasn’t watching close enough, and did not take action until it was too late. Some of my losses were unrecoverable. A portfolio, is a work in process and should change with the financial and political environment. I have concern over volatility in the comming year, therefore I have sold most of my individual stocks and allocated almost as noted above in the beginning goal.
Sincerely,
Connie
Dear Martin, I have been reading your letter for many years probably longer than most of your subscribers, I am 78 years old and have seen much in my life…. but nothing like we are seeing today. I have to say you and your crew of writers are some of the best minds on the planet today with good logical thinking but…. I am afraid logical thinking doesn’t prevail anymore…….sorry. There is no crystal ball with all the answers, we are in the”Humpdty De Dumpte syndrome”, it is broke and can’t be put back together again as we know it. What ever we end up with will be so restrictive and hard to run it will inhibit growth and new jobs so you can expect more of the same for some time to come. If you think gold…….how can it go up if the dollar is going up to. What in the stock market isn’t already overprice and ready to go down and doesn’t the bad stock drag the good stock with it when the overall market goes down? If you think real estate is a good investment…..think again! there are a lot o forclosers coming your way. rental prices are coming down, apartments are over built and the Banks will be renting below market to keep cash flow…but they will go out of business anyway because they are under the illusion that real estate values are coming back soon and will wait till the last minuet to implement any plan. If you think China is the place to invest…let me just say this a old salesman I knew said ‘EVERYBODY LOVE TO BE LIED TO”, such as “your are so beautiful so handsome and Santa Clause will give it to you and don’t forget the tooth fairy”, well, if you don’t think China “Cooks the Books” about their thriving economy…. then Santa will bring you a nice present in July. At the present time hold your dollars….. forget return on investment, put your money in treasuries and wait until you can see clearly what is ahead. Gut feelings are great and I rely on mine all the time and my gut tells me to wait.
After watching the market make advances for years, I bought into it and jumped into the market in January of 2000. After a brief rise, the bottom dropped out and I listened to the stay in it for the long haul crap and lost half of all my money. I took the remaining half and bought gold with it and I am back to about even now. These times are different than what America went through for 200 years. Now we are past peak oil production and have a bloated bureacracy to support and Representative Democracy has reached its heights of inefficiency. Sadly our debt is so high that we cannot do well for many many years now. Kind of like the fall of the Roman empire. For many years we essentially had unlimited resourses. Those times are over. I am out to get as much strategic resourses now as I can. And it is especially important to hide my valubles from the US Government. They don’t know how much gold, silver, copper I have stashed away, and I am going to keep it that way. Money in the bank is sinking fast and at risk from Doctors, Lawyers, Dentists, and politicians. I envy the rich who can leave the country while our bogus money crashes like Haitian buildings.
When Peter Grandich says get out. You better believe I get out. When he says get back in. I buy it up. I also listen to Martin Weiss. Typical wisdom has to be able to see the big picture also. Our country is in dismal shape.
Investing in stocks, precious metals, oil or other natural resources, or foreign currencies are sure money-LOSERS in the coming credit wipeout, bringing about a hyper-DEflation, which is going to be in force for the next few years, though few will believe it. The only way I would touch those is on the short side. I wouldn’t touch corporate bonds or even the sovereign debt of most foreign countries, as they are almost sure to default. The LAST thing that will be defaulted on is short-term U.S. Treasuries. Once deflation has run its course, though, it’s back-up-the-truck time for gold and stocks. But for now, a confirmed Elliott Wave count tells me to avoid everything but the safest cash and cash equivalents like the plague.
Despite where in the world I may invest I look at the same criteria as I would if I was looking at domestic stocks. I like companies with no or low debt. I like to see it grow the old-fashioned way; without resorting to borrowing.
But I also look at the politics of the country. If a particular country has screwed any company in the past (as Russia did to Shell) then they are forever in my bad books. Another example is how lenders to GM were screwed in favour of the unions. This makes me very dubious about investing in any unionized company in the US.(I’m Canadian). I believe that South Africa is thinking about nationalizing all mining companies (although they deny it). Obviously if you read about things like China building a huge expansion to their rail system then an investment in steel/iron ore and coal is obvious. But were are they going to buy it? Australia, Canada, Brazil or Russia?
I recently read an article a few days ago about which countries are freer and more open for business. Now I feel much better about my Hong Kong stocks (I presently own three).
A tip! Buy Lithium Corporation at between $1 and $2 a share for future growth. Lithium batteries will revolutionize the electronics industry in a few years, to say nothing of electric autuombiles.
I wouldn’t invest in stocks; instead, get in the futures market and start with the e-mini SP500. All you need is a moving average on a specific time frame (I us two different time frame tick charts) and an indicator in the lower panel.
None of your time is expended trying to select the country, commodity, sector, industry, and specific stock (huge advantage). Trades are never left on the table – no overnight worries for any type of negative surprises as in the stock market. Other advantages = many. I used to be heavily in the stock market for many years.
It’s very difficult to know who to trust for advice, there is the herd mentality and the self interest factor. It’s equally hard to know how to invest since funds cover such a broad spectrum of investments. What’s is interesting is that during 2008 very few fund managers managed to avoid the meltdown. Where is the diversity in thinking? It is non-existent.
I listen to Tony Sagami and Larry Edelson. I think they give good advice. Although I am a new investor and have a very small portfolio, I have great fun choosing stocks and etfs. My husband keeps me balanced with cash and gold bullion in his accounts. I also ask God to guide me and He does a great job, even though I don’t always follow His advice. But He’s always right!
I purchase stocks based on; low p/e ratio,assets at least 2 to 1 over funded debt,good dividend payout,in good locations,not in places like Argentina,England,Italy,etc.,and companys that will benefit by the current trend,not some company that makes buggywhips.
My wife and I had invested awhile ago in the gold EFT, GLD. Although we made gains in our purchases, we recently liquidated our positions as we had read about the possibility that the GLD Trust may have fake gold bars which were actually composed of tungsten bars that had 1/8th inch of gold on the outside. Google “tungsten fake gold bars” and you will find the story about last Oct. 2009, the Chinese took delivery of some gold bars that when tested, were found to be fake. The serial numbers on some of these fake gold bars with tungsten core blanks were traced back to Fort Knox! As we weren’t able to verify the truth, we sold our GLD EFT, until we could find out if this could be real or just a rumor.
I follow all your staff in newsletter, email updates and web broadcasts. I also follow the
million dollar portfolio and the analysis of Claus. I like his analysis, but stay more invested than Claus on a per centage basis. Each person must invest at their comfort level and due to age my investments vary with national and international tensions
USUAL% PRESENT%
Emerging market 25% 10%
Natural resources 25% 20%
Precious metals 45% 45%
Cash 5% 25%
Weiss is my primary source of reliable information, Marketwatch, CNN Money and market news. I also watch Complete Investor to keep me focused. At 79 years , I evaluate the situation, move in and out of stocks easily, try a balanced method that misses the big moves ,but try for 20% gains or so and not lose money or sleep.
As Claus says, I am not a fund manager that has to follow an investment ratio by charter.
Richard Dyck
It appears to me that the most important thing anyone can do to dicipher what is going on in the government, the Fed and Wall Streetm. To make accurate financial decisions, is to realize which economic model they are using and use a better one. They are ALL Keynesians and Monetarists that want to spend their way out of recessions by printing and throwing fiat currency (FRN’S) at the problem. That is like throwing gasoline on a fire. So, only by educating ourselves about the five types of economic models and using the best one for us individually, can we survive. I believe that the Austrian model is best. But, 65 plus years of Keynesian “voodoo’ economice IS NOW taking its toll on this beleagured nation and “US” poorer and poorer peons. The nation will be buried along with John Maynard Keynes model of economice.
You guys really want more. Thought I would have laughed you right out of your chairs by now.
Currently:
40% Real Estate (Looking at selling 10% and carrying paper here 3x-4x mark up at 10% interest) Once sold, will purchase another 10% same sales mark up and 10% carry back.
40% Gold Coin (China keeping value lower here until dollar falls) Many futures contracts here at about the $1500 level will default in 3rd and 4th quarters. Brokers will catch profits on that one.
20% Cash (Stocks, food futures, more R.E.)
Looking at moving @ 10% cash this week into: fxp, sef, and sh to short market upon Martins recommendation. I’m agreeable on many charts. Sorry Martin but not all ETF’s. Will set a trailing stop at 8%. As the market drops, investors will move into the dollar causing the dollar to further rise.
When I think the market has hit a double bottom. Or, current dollar value breaks below the moving average, will move some or all into something like UDN to catch the dollar fall. And maybe an energy play like: pbt, sto, ptr, yzc
Also at bottom, look at ETF’s like: brf, ech, epu, pin, epi.
If the US gets close to default look at cyb.
Notes:
1.Charts have a lot to do with volatility. Stay away from messy charts.
2. Maybe I’m stupid or something, but when the US defaults 2 Trillion to China, do you really think China is just going to say: “Well I just don’t think I’m going to lend you anymore money?”.” And really, we have had at least a 6 to 1 advantage anyway.” Heck No! They will grab everything US on the table, and in the accounts. Look at how much they steal, copy, and bribe already. Plus, they don’t let half as much come in as goes out. Get Real Folks. These Guys will grab it. And, another consideration is: “Their market always will fall with ours until our last default, or they float their currency”.
I have been holding “cash” for almost two years. Sometime in 2010 I will short the S&P 500 and / or the DOW. Right now these indexes have crossed the bottom trend lines and will try to re-establish the bullish correction that has been going on since March 2009. I am waiting for that to fail – if not now then soon. I read money & markets but only pay attention to Dr. Weiss, Brian Rich & Claus Vogt say – they are all telling me the same thing i.e. a crash is imminent. I do not trust EFT’s because I don’t really understand them and I believe sooner or later some government legislation will meddle with them. I don’t trust emerging markets for the same reason. I will stay bearish until PG hits a trailing 12mo. P/E of 5 or 6. Then well – everybody needs Tide & diapers don’t they?
1)SMALL CAP ENERGY AND GOLD STOCKS WITH POTENTIEL FOR GROWTH IN
EARNINGS.
2)I WOULD GO BY CHARTS OR NEWSLETTERS FROM RELIABLE SOURCES LIKE
WEISS FOUNDATION.
3)I WOULD EITHER INVEST 50% IN EACH OR MAYBE CLOSER TO 60% IN
THE HOTTEST TREND.4)KEEP UPDATED WITH LATEST TRENDS.
I did take your advice and invested in stocks based in china or having interests in china and every single one tanked..went down hard after I had bought..and went well up after I had sold.
The result is that I noe seriously distrust all stocks involved in china.
Profitable stocks
Stocks with no debt
US dollar, no matter what you or anyone else says. Strength is in safety and security.
I find myself reading such newsletters as Utility Finder ,and reading biography and philosophy of Sir John Templeton and Benjamin Graham.
Martin,
I listen to you! Education, education, education! I have in the past months changed my investment allotment including natural resources, precious metal and divdend paying stocks. The big question is… %—You did state several weeks ago hold 50% in cash. I am bothered by the poor showing of the U.S. dollar. Do we want to hold 50% of our portfolio in the greenback? I would enjoy more info on this subject.
Many thanks for all you do!
I seem agree with the idies outlined by dr Weiss
I use Large Cap Value, Large Cap Growth, Mid Cap Growth, International Growth & Income, Utilities, and Natural Resources.
These are all mutual funds with an exceptional mutual fund company. Sometimes I use
A funds and sometimes B funds. I do very little direct stock purchases because of
the risk involved. I trust the skill of seasoned mutual fund managers more than I do myself or brokers who buy and sell individual stock.
I do not mind the fees involved with mutual fund purchases as long as the total return
history of a fund is reasonable. I look at 10 year returns to judge a fund and also look at the tenure of a mutual fund manager.
I do not deal in commodities or futures because of the extremely high risk.
Last year my portfolio regained about 45% of the loss from 2007 to 2009.
i don’t have the time, resources, knowledge or intestinal fortitude to attempt to move in and out of different markets. i began subscribing to Morningstar’s research about 8 months ago. being that they are “independent”, theoretically they shoud not be making recommendations based on greased palms. so far it has proven to be worthy. however, with the up market, the monkey and dart strategy has probably been relatively successful also.
i don’t think anyone knows and certainly my broker has no clue. the money they loose is yours – if one buys or sells they make money. i did better last year reading and doing it myself with the brokers help; what this year brings is different. What nerves one needs….. my next attempt will be how to read charts and not guts.
sharon stepman
I don’t know that I really have an answer to your latest question. Since I do not have the proper education to really understand the financials, charts, etc. to make an educated decision on where to put my money, I would rather find a source that I truly believe in to direct my investing. I would to subscribe to one source for informaiton and guidance rather than getting 12 newletters of which non agree on what to do.
This is probably not what you want to hear, but I wouldn’t try to build a growth portfolio. A growth strategy would need to be stock and commodity oriented. For an average investor, commodities, with the exception of precious metals, have too many constantly changing variables, such as weather or politics, which means constant trading. It also means continual monitoring of input which requires more time than most investors have time for. As for stocks, I firmly believe that the whole idea for investing in stocks is to be able to share in the success (profits) of a company, meaning dividends. Since growth stocks don’t as a rule make payouts, an investor only profits when he/ she sells at a higher price. And is this not the classic “greater fool theory”? This makes growth stocks no different than real estate, art, antiques, wine, or what have you. Some people will make money this way, but most will not. I think Nilus would agree with me here.
As for scientific tools, hogwash. Look at all the computer programs and analysis software out there already and they still can’t get it consistently right. A large part of investing depends on human nature, and you can’t quantify that.
The lure of growth is that you will hit the next “ten bagger”. Since the reward could be so great, a small allocation is sufficient. Here is where the individual has to think about how much he/ she can afford to lose, NOT how much could be made. I use 10% as an absolute maximum. More than that, I might as well take the money and just go play poker.
A long time ago I read a suggestion that said that each time you make an investment, write it down along with the reasons you made the purchase. If you review the reasons on a regular basis and they are still valid, then buy more or hold. If not, then sell and move on.
Mr. Weiss,
Great tip on Jayhawk Energy last month. Went from 0.60 to over 2.00, wow! What has made it tank the last 2 days (1/25 & 1/26/2010)?? No info was given in any commentaries you’ve provided or I could find.
I would want advice from some experts that were taking a realistic look at the big picture and that could recommend moves while there was still time to act.
My portfolio:
20% natuaral recsources
40% mutual funds weighted to asia
40% fixed income
I am 73
20%-cash
15%-gold/silver
20%-oil/energy service,exploration (foreign & domestic)
15%-tech (foreign & domestic)
15%-Agriculture (manufacture & food)
15%-ETF (Bear market hedge)
I would follow the advice of someone who successfully amnaged money during a long term sideways and down market: Benjamin Graham. I would average out of asset classes that are over priced and average into those that are under priced, focus on securities in those classes with sound fundamentals, and rebalance regularly. Since the market will be long term sideways, my bias wold be towards dividend paying securities.
Martin, Applicable to these times, I would answer your questions as follows;
Gold & other precious Metals—- Profitable Asset classes; Scientific Tools:
1) History of precious metals Past 2000 yrs.
2) All Commodities; Copper, nickel, mag., lit., iron, all metals — Oil, Gas, Potable Water, Hydro Elec., Neuclear, Wind, Solar Elec., Neu. Fision,
3) How much money to invest in each? — I believe the answer can best be answered by Larry, Sean And Tony. Primarily because they have a better handle on what’s “hot” market wise, at any given time. I suggest that they confer and provide an agreed to formatted matrix chart to be later used by all. The Chart input info. would be individual and their interpretation of the best portioning of their 100% “Ideal Portfolio.” Constantly modified & updated. Stock Symbols & timing
inclusive. Thanks! A. Montalbano
Hello Martin – apologies for not answering your earlier questions.
I recently purchased and am working my way through, (whilst escaping the worst of the English winter in Cyprus) Jim Jubak’s book, Jubak Picks. It appears to set out a practical approach to investing by following a well thought out investment strategy, which he keeps updated.So it should answer the points you raised
Would welcome any comments you may have
Happy and profitable 2010
Martin; My invenstment portfolio
Real estate 51%
CDs Bonds and notes 20%
Close end Mutual funds 13%
Dividend paying unit investgments 10%
Equity 6%
these % may vary as I try to guess the upcoming economy. My Broker has given me good advise in the past.
At this point, the best way to find growth is to search out non-US investments both in stocks and fixed income. There have been some brilliant investments in American compnies with foreign exposure. I’d use them to make up a stable base for a portfolio, then seek rapid growth elswhere. I think we’re in a phase where the US dollar is about to collapse. But with all the politics involved its hard to predict where to look for alterantives.
As far as reliable tools go, it seems that even the experts go with “the last scheme that worked”. Their emotions to keep up with, or at least not get beaten by the crowd influence how they make investments. Also, in my opinion, most advisors make up charts with back-dated information to show that they are on to something and make a sales pitch accordingly. So, I don’t think there are any consistantly reliable scientific tools to monitor investments. For an average person their best chance is to get lucky and find a mentor who is “hot” at the time and make the best of it.
I work so many hours a week that I don’t have time to do what is necessary with my money. Therefore, I searched for someone whose intelligence and point of view about the economy seemed to resemble mine. I came to you and Claus Vogt. Now Claus manages most of my money and I manage a small amount in the US (I live in France) and a tiny amount here as an exercise to learn what one should do. I am learning everyday – sometimes paying a price for my ignorance.
Re: a diversified portfolio at this time
With all the cross-currents, I haven’t a clue. That’s why I’ve subscribed to your newsletters for years. This seems like a critically important time to make investment decisions. I welcome your help in putting together the appropriate diversified portfolio.
TVM
It seems that everyone is trying to sell advise and what to do. I try to rely on those who have shown me over time that their point of view and suggestions have been good and on target. I also try to evaluate the way their advice is presented and if it makes logical sense. Wish I had a working crystal ball to help at times.
I appreciate the effort you put out to try and help the working class investor with sound and thoughful information. Thank you for all your help.
Mine are dividend stocks both foreign and local. How do we buy gold without getting ripped off.
No answers -
Just a question – -
Why, when the price of gold;silver, and other commodities have increased in value (price wise at least,) has my portfolio, heavy to commodities, lost so much over the last year?
(Approximately $300,000 of a 600,000+ portfolio.)
Warren Ogren
warogren@cheqnet.net
——————————-
Is investing in dividend paying stocks still a profitable choice, or are they to expensive?
Can you recommend a emerging market fund or an ETF.
Thank you
My plan is to leave the cash I have now in savings accounts in a fund to help my grandchildren with emergency needs for cash when normal loan sources can not meet their needs. I am earning interest at an average of 2.8%. I need to find a low risk way to invest these funds that would earn at least 5%. So far no one has come forward with a better way. Probably because the picture changes almost weekly.
Martin, To answer yr questions:
First, I would have 25% of it is commodities. Good sound commodities which are certain to appreciate as the US dollar tanks
Second, I would have 25% of it in Dividend yielding Stocks that have history of paying regular dividends. They might be US companies but probably not.
Third, I would have 25% of it in Developing or Asian Companies which pay dividends.
Fourth, I would have 25% of it in cash which I could use in the open market. Not all at once, but proportionately as and when situations present themselves.
Martin, here is my answer to your fist question.
Like the other above me I don’t have much of a clue where to invest my money. I search for but have not found a successful advisor that has had really good growth. Most always tell you what they did after the fact which I think is poppy cock. Tell me something that has a future potential.
All I know now is that I am invested in a few solar energy stocks, Silver (SLV) and I was in gold way back when it was 800 but sold out at a profit. I will probably get back in it with about 20 -25% of my money invested in gold, most likely ETF’s because all of my money is in an IRA so physical possession is not really likely due to the tax problem of pulling out cash to invest in physical items.
I have mining stocks which are not reall performing well for the last two or three years. They all claim a good future but their stock price is not moving. Even the ones that are producing gold. They don’t seem to be moving even though gold moved up.
I have one high interest coporate bond that is a 30 year instrument and it is producing well.
I have two companies that are heavily invested in the Haynesville Natural gas fields but they are not moving, in fact they have not recovered yet from the last market crash. They are about 50% recovered. They showed great promise but in the last two years not much movement there.
So, in summary I am not very good at picking stocks. I rely on people like you, Martin, to help me.
Frankly though I have read everything that you send out but it has not helped me much either because I am not picking the right choices or I ignored your warnings. Its been an expensive lesson.
Martin I think your heart is in the right place and you would like for all of us to become multi millionaires, but the market forces have been as unforgiving to you as they have been to me.
Regards,
Ron Thompson
In order to build a financial investment portfolio, you need to do your homework first. I look at 3 broad areas that cover the spectrum of economic analysis. They are #1) Economic/Financial Fundamental Analysis #2) Technical Analysis and #3) Cycles Analysis. I look for the best expertise in EACH of these disciplines (this includes folks from the Weiss Group). This is the BEST and ONLY way to get a feel for how the economy/markets are doing now (Fundamentals) as well as what the economy/markets have done in past history (Technicals and Cycles) in order to forecast or time the markets. Based on this 3 way analysis, I can then decide which asset classes are best and dynamically change as the analysis changes. I am not a short term trader, but like to trade on intermediate and long term basis (ie. Quarterly/Yearly Adjustments). Very, very simply, right now, I see the following: Fundamentals are “OK” (Gov’t Stimulus). However, Technicals and Cycles analysis are pointing downward for equities. Therefore the overall weighting of the 3 are pointing down. Which says the stock market is topping right now and poised to potentially go down very significantly this year (Potential Mini 2008 Scenario). Therefore, based on this, I have the following allocation:
“Core” Gold/Silver Positions (10% of Portfolio) (Not adding to yet)
Gold/Silver Stocks (10% of Portfolio) (Moved some of this over to Treasuries)
Cash (5% of Portfolio)
Govt Long Bonds “Treasuries” (15% of Portfolio) (Adding to this)
Govt Short Term Bond Funds (50% of Porfolio)
S&P Short ETF “SH” (5% of Portfolio) (Will add to this dependingseverity of Stock Decline)
I continually evaluate the fundamentals/technicals/cyclicals on a daily weekly basis in order to validate and/or change the asset allocations…I use this analysis to make changes as appropriate. For example, if all 3 disciplines were to point up, I would reallocate to a more equity biased portfolio. That is NOT the case right now, as 2 of the 3 are pointing down.
Martin,
Diversification by sector and country is an investing concept I use (thanks to your great advice). I am certainly afraid of what is going to happen to the USA with all of this debt. It appears that most people can not comprehend what this huge debt means to us as individuals…. so they ignore it.
I hope and pray that Congress gets inspired to look after the long-term health of the country, but so far that is not happening. They seem to feel that the US Treasury is an “infinite” piggy bank.
I don’t have answers for the specific questions. I invested with you many months back in the Million Dollar Contrarian. I dropped out because I lost a lot of money with the suggested investments. I have, however, looked to Larry, Tony and Sean. I have recouped my losses with following their advice. I’m not sure where to go from here. This has been a terrible week for the stock market and also China. It’s very scary. I also feel a little guilty investing in China. I am trying to find more U.S. stocks that pay a good dividend. I have invested a little in Brazil, Argentina and India. I feel O.K. about them. I am 74 years of age; so, I need to be careful
My self directed ira is 90% in gold mining stock 10 % in cash which will be reinvested in gold mining stocks very soon.
Hello Martin:
I am at a total loss as to how to handle this mess. I would have to rely on your years of extensive wisdom and experience. I also feel that this is a rare privledge and opportunity in these times to have a person of your knowledge and expertise to guide us.
All the best to you and yours.
Patricia Lowder
Thank you for your reply. After giving this more thought. I think precious metals have to take front and center even if they fluctuate in price. Having been an assayer I know the processes from beginning to three nine fine.
We can thank the EPA for closing profitable minning in the USA
Take care!
Patricia.
My current investments are real estate and gold coins. I liquidated all my stock and mutual funds a year ago and invested in gold coins (over $225,000 so far) and bought bank foreclosures (15 houses) at rock bottom prices and put tenants in while I wait for the market to move up again. I may never get back into the market again.
THINK ABOUT IT ,,, THE CRASHES WE HAD BEFORE,,, THE BANKS WERE NOT BAILED OUT AND GOLD SKY ROCKETED.. NOW THE BANKS ARE BAILED OUT AND CAN WITHSTAND A HUGE MARKET CORRECTION..AND GOLD WILL STAY FLAT AND COME DOWN IN PRICE.
WARNING SIGN …. BANKS ARE TIGHTING LENDING AND HOLDING OUT FOR A HUGE CORRECTION.
LOOK AT THE COPPER PRICES,, (THEIR RISING) AND ALSO ARE THE LME WAREHOUSE
WARNING SIGN ARE: RISING WAREHOUSE SHOULD CREATE LOWER COPPER PRICES
BUT IT IS NOT HAPPENING..BECAUSE OF CHEAP ( US DOLLAR )
THE ONLY THING THAT I CAN SEE IS THE CHEAP (US) DOLLAR,THAT WILL GAIN STRENGHT,BECAUSE JOB POSTING ARE RISING TO LAST YEAR, BECAUSE THAT IS MY POINT OF VIEW ON SOME OF THE REASON’S FOR THE DOLLAR RISE…. AND THAT MEANS A HUGE CORRECTION IN MINING METAL STOCKS AND RESOURCES AS THE DOLLAR GAINS STRENGHT.
JOB POSTING ARE ON THE RISE
HOLD CASH
AND GOD BLESS
For the questions here are some ideas;
Q. If you were asked to create the ideal strategy for building, diversifying and balancing a growth-oriented portfolio, where would you begin?
A. At this late date of the financial debacle I’d begin by asking myself if I am capable of managing a foreign currency investment. The start of such a currency investment would be to visit the country of the invested currency and open an account to receive the funds. If the amount of funds to invest is sufficient to make a small investment purchase of a rental unit it would be the best investment one could make in that an appreciating currency adds value to a (normally) appreciating asset. The investment property would be rented and hopefully cash-generating. The profit in such a real estate rental investment is made by making the best deal up front and making sure that the expected rent covers at least the mortgage and maybe the P-I-T-I (principal-interest-taxes and insurance). Spending some quality time in the foreign country will allow one to make sound friendships with prospective managers and maintenance personnel on site. At least it will make one aware of the curves and corners of the local business communities.
Q. What reliable scientific tools would you use to identify the most profitable asset classes moving forward?
A. What would one invest in except something that one knows inherently or is excited in entering. The “gut feeling” of any investor is based on knowledge and appetite for the investment-type, one never invests or gambles in an unknown unless one is ready to roll the dice. The best scientific tool to use in marking the most profitable asset class is one’s own interests and knowledge.
Q. How might you decide how much money to invest in each?
A. In taking the advice as I have followed of another investor; get the non-producers off the table and clear the deck for action. If one must diversify one’s investments one must discern the productive investments and cut loose the non-productive ones to find capital to go to the stage of diversifying the portfolio. At that point any funds available are used to make the initial diversification investments in familiar or “passionate” assets. That does not mean to invest in a motor car company because one is passionate about cars, but more like finding the asset class of perceived increasing value and if it is an asset class that one is inherently passionate about or knowledgeable of it will be that much more successful of an investment choice. The foreign investment class is one for those who are passionate about travel and/or who know something about the foreign country that is intriguing as a new investment. Invest so as not to overextend in the entry to an asset.
One has a choice to invest in multiple or single assets. If one is to expect maximum performance one should set multiple asset investments of moderate value for the best balance of the portfolio.
My tactic was to invest in high-end properties in foreign countries. This was successful to a point. I found that others who had invested at my urging had done so in less expensive but solid construction units and had made much higher profit margins by not diving into high expenses at the beginning. Those more moderate cost investments were cash-positive from day-one, something that took much longer for the higher valued properties to accomplish.
It would likely be more profitable from the beginning to make smaller multiple investments instead of a large investment intended to pay-off higher returns on that one asset.
Q. And how would you know when it was time to CHANGE your portfolio structure to avoid danger or to harness emerging new profit opportunities?
A. Stress is an investment drag. When one becomes stressed and uninterested in one’s investment choices one must begin to seek alternative investments. Likewise, when one is complacent with investments one must be aware of the danger of complacent behavior and make the change if only for safety sake.
If one loses trust in the investment market at hand and business in general it is a good sign to sort out the portfolio and begin to find investments anew, preferably in a business market that is inherently poised to advance against the current state of business affairs at hand, such as a foreign investment.
A good attention to international business and finance is the start of intriguing new investment opportunities. Subscribe to a foreign business journal or newspaper for insight to business news of international scope, one cannot depend on business reporting from one domestic source.
One caveat; do not invest against your better conscience. If one is actively aware of inherent problems of the nature of an investment and is even slightly uncomfortable with even part of an issue surrounding the asset investment then do not make the investment. Arguing from within is the best way to misdirect one’s strength. There are items I will not invest in for the problems they engender. As well, there are assets I will gladly invest in if even for speculative investment, to the degree of safety in the investment. However to date I have not had the need to be invested in either shade of such assets.
Fund and asset managers are similar to a spaghett western – “The Good, The Bad And The Ugly. Most of their clients get killed and they ride off into the sunset.
I have to be candid, I believe NO one has objective evidence but they can have GOOD luck, Good guessing and hit the mark on occasion but for the average investor they would need to be spending 99% of their time researching and using all available sources, and still come up asking the monkey if he would through the dart. My limited success, was to save my retirement investment in 07 by asking for God’s help at a moment to sell off to the money market fund at the hight of my portfolio worth. I did at the moment of confidence in my mind which started to drop the next morning and never stopped. I lost nothing for the next year accept it was not growing much of anything. But I didn’t take the big hit. Now I’m suffering the slow drain, still looking for safe harbor. (:-)
Brokerage firms make their living off other people thru their commissions. They are well staffed with analysts, salespeople, & other types. However, I think they usually act as the middle-man. I concede they have much more info available to them than I will ever have. Even for a retired, fixed income person, I wish there was some method to invest directly just as I would trade shares with my present mutual fund. E. Kaminsky
Fixed income is Wall Street’s Achilles heal.
i am still confusing about the investment. most my asset are in annuities.
Martin, when I look to the future, I see a world in need of energy. Therefore, one should have positions in a diversified basket of energy related stocks and/or ETFs (25%). Next, the growing world population needs to eat. That means agricultural related stocks/ETFs (20%). As inflation begins to take hold in the second quarter, I suggest a gradual move into unleveraged inverse intermediate- and long-term Treasury ETFs (15%). Due to inevitable inflation in the United States and a global move by central banks to diversify their concentration of dollar denominated reserves, I suggest that gold and silver will become very attractive to central banks and individuals. At major support levels of both gold and silver, I would leg into long gold and silver postions through ETFs (15%). To obtain a component of income, I would look to highly rated mutual funds with short duration (less than 3 years), investment grade corporate notes of worldwide corporations (15% total, no more than 5% in any given fund). Finally, I would keep 10% of the portfolio in high-yielding money market accounts with a $1 NAV. That will provide some price stability to the portfolio and funds avaliable for emerging opportunites. This is the portfolio I have embarked upon building.
I have enjoyed reading the comments of others, as there is a world of very bright people who are willing to share ideas with one another. Thanks for making this Blog available.
I hope that I’m able to invest in Gold, Bio Tech Stock, and Renewable Energy in 2010. It all starts with taking care of God, my family, and starting a non-profit organizations to help end homelessness for all. l hope and pray that I get this great opportunity to show the world what I’m made of. It’s in God’s hand for now. I look forward to being part of your market research team!
Sincerely,
Melissa Leonard
I have limited faith in my short term predictions. I am pretty good on predictions over the six to twenty four month period. This almost certainly puts me into options. For instance I know silver must rise over the next nine months. Any call I get over 20 has a high probability of paying out. Every once in a while you get an option which will pay out over a year- Long term capital gain! Bob
Smart to get out. It has long been known that GLD,IAU,SGOL are ponzi schemes brewed up by the same Wall Street crooks that brought us the MBS mess. But precious metals are still a good investment. Take a look at CEF and PHYS. These are legit.
I am now looking into swiss annuities and am very interested in their possibilities. Who do you use for your swiss annuity? For my long-term savings I am quite fascinated with the possibilites that swiss annuities offer.
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