Mike’s note: At Market Minute, we believe in making smart trades that provide consistent profits. However, we also believe in keeping those profits safe after the check’s cleared…
Today, our colleague and editor of Strategic Trader, E.B. Tucker, tells you about the five main types of “asset classes” he says you need to maintain financial independence… resulting in more stable wealth, without giving up your aim for massive profits.
Read on to hear what E.B. says about building wealth, and keeping it… and click here to find out about his latest investment that’s given his subscribers an 857% gain…
By E.B. Tucker, editor, Strategic Trader
It wasn’t easy to get rich…
It took me years of perseverance and hard work that few people are willing to dedicate themselves to.
But when I finally achieved my dream of financial independence, I realized the hard work was just getting started.
If you’re like most people, you probably have the wrong idea about wealth.
Even if you have a lot of money, you’re still focused on getting rich.
But you only have to get rich once.
After that, your goal should be to stay rich. Meaning you have to protect your wealth.
Rich means different things to different people.
But no matter what your level of wealth is, it’s vital you guard your wealth… and not swing for the fences on every pitch.
That’s why I developed a simple wealth-protection strategy. It makes sure I stay rich no matter how the market behaves.
And today, I’ll share it with you…
Picture Yourself on a Bridge
Picture yourself carrying five buckets of water across a narrow bridge.
If any of the buckets gets too heavy, you’ll lose your balance, tip over, and fall off. You need to make sure all five buckets are balanced, so you can get across safely.
Each bucket represents an “asset class” (a group of similar investments) that makes up your portfolio. If you want to continue to have financial independence… and avoid falling off the bridge… you have to get the right balance.
The result is more stable wealth… without giving up your quest for outsized profits. I like investing this way because I no longer worry about trying to maximize my profit on every trade… or every time the market changes course.
Now, it’s up to you to determine what you put in your buckets. But these are what my five buckets look like today:
- Long-term stock holdings
- Real estate
Let’s go through them… and why they’re the best way to grow, and protect, your wealth today.
Wealth Bucket No. 1 – Gold
Gold is cyclical. It tends to get hot and go on a run. The run usually lasts several years and includes a few soft patches… which is when savvy investors get in.
There’s also a downside to the cycle. That’s where we’ve been for about seven years. But now, we’ve officially entered an upswing in the cycle.
When gold is cheap, I pour money into it. And it’s the cheapest of the five buckets right now.
I don’t view gold as an investment. It’s a way to protect your savings. It’s survived every financial crisis, and it will continue to do so.
I don’t think about this bucket often. I just get the gold… vault it… and move on.
Wealth Bucket No. 2 – Long-Term Stocks
One bucket is for stocks I plan to hold for the long haul. I typically own between six and eight stocks at any given time.
I don’t trade these stocks often. I’m only a seller if something happens that changes the business landscape for one of the companies.
This bucket is for real businesses… not hot-potato trades.
These aren’t the most exciting investments in the world. But over time, there’s huge value in owning stakes in rock-solid American businesses.
You end up with companies that slowly capture market share from their competitors, invest money back into their businesses, and pay dividends.
I don’t see how you can get hurt having this bucket represent 20% of your wealth.
Wealth Bucket No. 3 – Real Estate
Another one of my buckets is real estate. But it’s important to note that this bucket – like the others – should change along with where you are in your life and market conditions.
I put most of my money into a real estate bucket in 2009 and 2010. The U.S. housing market had just crashed. If you had the money, you could buy houses for next to nothing.
That’s exactly what I did…
I bought six single-family homes. I bought one of them for just $10 per square foot. I spent another $10 per square foot fixing the place up. So I put about $20 per square foot all-in.
The guy before me paid $160 per square foot… and ended up in foreclosure because he bought near the peak of the housing bubble.
Today, I’m not adding to my real estate bucket. There just aren’t great deals out there. This is key to how I invest. Rather than fight the market, I let it determine how I allocate my money.
It’s a mistake to look at your home as an investment. If you buy a shack, and you plan to live in it while you remodel it until you sell it, that’s an investment.
Otherwise, you’re buying shelter. And that’s not something to speculate on.
Wealth Bucket No. 4 – Cash
Cash should also be one of your buckets.
You want to sit on plenty of cash. This way, when an opportunity shows up, you’re ready… and able… to invest.
When assets go on sale in a crash, most people don’t have the cash to take advantage.
They watch once-in-a-lifetime buying opportunities come and go… only to say they wish they had the money.
The exact amount of cash you choose to hold is up to you. If I’m 25% in cash, that’s pretty good.
It’s up to you how to determine how much of your wealth goes into each bucket. But you want to have a plan and stick to it and avoid putting all of your wealth into one or two buckets.
In the 2008 market crash, you didn’t need to be 100% in cash to take advantage. I had stocks that went down a lot. But I had some cash to take advantage of other opportunities, such as the real estate deal I mentioned.
Wealth Bucket No. 5 – Speculations
Speculations should be one of your buckets… but this bucket should only be a small percentage of your wealth.
This protects your downside risk. And you only need a small grubstake to make a small fortune in the right kind of speculation.
The key is separating good speculations from bad ones.
As a professional investor, a lot of opportunities come across my desk. Most of them aren’t worth my time. You have to pass on a lot of bad speculations before you find a great one.
There are plenty of good speculations in stocks right now. But I’m most excited about a different type of opportunity called “Omega Shares.”
They only require a small stake to produce life-changing gains. I’ve seen them rack up triple-digit gains… sometimes in under a year.
In fact, my readers are already sitting on an 857% gain thanks to these “Omega Shares.”
Most investors don’t know how to access these shares. Wall Street tries to keep them hidden from you.
I can’t reveal too much about “Omega Shares” here. But you can find out how to profit from them by attending my free Explosive Profits Summit tomorrow, February 5 at 8 p.m. ET.
I’ll share all the details with you then… I’ll even give you my top “Omega Shares” recommendations. You can buy these immediately and put them in your speculations bucket in your portfolio.
E.B. Tucker, editor, Strategic Trader
In Case You Missed It…
The Best Investing Summit of 2020!
E.B. Tucker will reveal an investment secret 99.99% of Americans have never seen before. They’ve used this secret to see extraordinary gains like 350%… 420%… 433%… 650%… 1,054%… 2,450%… 3,922%… 5,509%… and 6,200%.