Follow these 4 ‘Safe Money’ Principles for Success
Will opening up the economy lead to a second wave of infections and shutdowns? Or is the worst of the COVID-19 outbreak behind us?
Will the nature of business investment and consumer spending be changed forever? Or will we just go back to “normal” as if nothing happened a few months down the road?
These are the big-picture questions policymakers and others are wrestling with. And while I certainly have my thoughts, no one can possibly have all the answers.
That’s why the markets continue to swing wildly from day to day, week to week and month to month.
So, what can YOU do as an investor? What guideposts can point you in the right direction? How should you position your portfolio in light of all the uncertainty?
Simple. Use the same, four “Safe Money” investing principles I do!
They helped my subscribers prosper handsomely BEFORE the COVID-19 outbreak ... and they will continue to prosper long AFTER it runs its course.
Principle No. 1: Any stock or ETF I recommend needs to be a high-quality one. Not just based on my opinion, but on the time-tested, completely unbiased, quantitative evaluation provided by our Weiss Ratings system.
Why do I use the Ratings as a starting point for investment selection? Because they work.
The system incorporates multiple fundamental, technical and momentum-based factors. Then it evaluates the underlying strength — or weakness — of tens of thousands of available investments.
That gives me a fantastic jumping-off point for my own research.
My main focus is on stocks or ETFs rated “Buy” (“B-” or better). But I’ll occasionally recommend a “Hold”-rated (“C-” or better) name if my research shows it’s poised to climb our Ratings ladder over time.
You can check the Ratings on your investments using the search tool at the top of our website here.
Principle No. 2: I need to see adequate trading liquidity and reasonable market capitalization. Too many illiquid and thinly traded investments went straight into the tank when markets tumbled in March.
That’s just a taste of the kind of pain they could dish out in a longer-lasting bear market.
Principle No. 3: I want market-beating income potential and solid dividend growth. In this environment yield is critical.
And I’m not talking about artificially “juiced” yields that the underlying companies can’t sustain long term. They have to be sustainable and growing.
Principle No. 4: Finally, I need to see reasonable amounts of volatility and underlying technical momentum. I don’t want to buy a bunch of turkeys that might surge 10% one day, only to plunge 15% the next. And I certainly don’t want to target so-called “bargains” that just keep getting cheaper.
That last bit of guidance is most important in this economic crisis.
Weaker, hobbled companies like Hertz Global Holdings (NYSE: HTZ, Rated “D-”) and J.C. Penney (OTCPK: JCPNQ, Rated “D”) were already struggling pre-COVID-19 outbreak. Those types of companies need to be avoided at all cost.
It’s no wonder both of them recently filed for bankruptcy protection, with Hertz struggling under a $19 billion mountain of debt and Penney buried under $4 billion.
If you focus on stocks, ETFs and mutual funds that incorporate these Safe Money guidelines, I’m convinced you’ll come out of this treacherous environment in much better shape than many others.
And if you add in other winning investments that don’t come with the same risks as traditional stocks — including, say, precious metals and miners — you should do even better!
In fact, my colleague Sean Brodrick expects gold to hit AT LEAST $3,000 per ounce in short order.
It’s why he’s inviting you to his urgent gold and silver briefing, Wild Gold Profits in a World Gone Mad, next Wednesday, June 3.
During this free event, he’ll reveal how the Fed’s monetary madness — plus other powerful forces — have opened the window to a once-in-a-lifetime profit opportunity.
Click here to register now, because this an event you cannot afford to miss.
Until next time,