The Fastest, Safest Way to Grow Your Money
Investment U’s unbiased, “actionable” investment insights are underpinned by the four fundamental principles below. And for the record, these are the very same principles our Chief Wealth Strategist, Alexander Green, used to triple the returns of the S&P 500 over the last five years for our platinum service, The Oxford Club.
1. Asset allocation. Investors are often surprised to learn that their most important investment decision is selecting the mix of assets to be held in their portfolio, not selecting the individual investments themselves. This is asset allocation. It’s how you divide your portfolio up among different uncorrelated assets like stocks and bonds. Which is why we have experts in six different corners of finance.
2. Trailing stops. Anyone can buy a stock. The real art of investing, however, is knowing when to sell. And trailing stops can nicely remove any guesswork. Such a strategy guarantees that your profits and principal are always protected. We typically recommend running a 25% trailing stop behind any position. And a 50% trailing stop on smaller-cap stocks.
3. Position sizing. We know nothing about your net worth, investment experience, risk tolerance, or time horizon. But we do have a position-sizing formula we recommend regardless of the above factors. Simply put, no single stock position should comprise more than 3% of your equity portfolio. If you want to be conservative, invest less. If you want to be more aggressive, invest more.
4. Minimizing fees. Incurring too many fees can be your portfolio’s silent killer. Given that, learning to invest your own money – and, in turn, erasing a big chunk of your fees – is a surefire way to better returns.
