SPACs and IPOs Make Headlines While ‘Safe Money’ Strategies Build Wealth

It seems like only yesterday the “SPAC boom” was all you heard about ... and for good reason!

Retail investors were clamoring to buy shares of special purpose acquisition companies (SPACs) in order to gain exposure to overhyped sub-sectors of tech like electric vehicles and space tourism. Almost 300 SPACs went public in the first quarter, raising an all-time record of $88 billion.

That boom went hand-in-hand with other crazy trends. That included a surge in initial public offerings (IPOs) from money losing companies and moonshot moves from “Reddit stocks” like GameStop Corp. (NYSE: GME).

What about me? In late January, I warned that this kind of manic behavior is extremely dangerous. And, in February, I urged investors to stick with a “safe money” approach instead.

So, how did that work out? Well, investors who bought GME at the close on the day my January piece was published are now sitting on losses of around 59%. Investors who bought shares of the high-profile space SPAC Virgin Galactic Holdings, Inc. (NYSE: SPCE) the day my February piece hit have lost roughly 68%.

These aren’t just cherry-picked examples, either. The Defiance Next Gen SPAC Derived ETF (NYSE: SPAK) owns 211 SPACs and shares of SPAC-derived IPOs. But that diversification hasn’t helped its shareholders much. SPAK has lost 28% of its value since early February.

At the same time, many of the stocks and funds identified by my “safe money” methodology have done nothing but climb. Why? They sport higher Weiss Ratings, juicier dividend yields, more sustainable profits and strong track records of success in all kinds of business environments.

They aren’t flash-in-the-pan names. They’re companies that have proven they can “win” — from both a business and a market-performance perspective.  

I can’t share a bunch of specific names here. That just wouldn’t be fair to my paying subscribers. But you can easily join them and share in the potential profits by clicking here. My next issue goes to press this Friday.

And continue to keep an eye on this space for general guidance. I hope you used that guidance from January and February to sidestep the current meltdown in many red-hot names ... and that you’re reaping the benefits of a “safe money” approach instead.

Until next time,

Mike Larson

About the Income & Dividend Analyst

In an era of high-risk exuberance, Mike Larson stands out as a leader in conservative investment strategies that outperform the market overall. Using the safety-oriented Weiss Ratings as a guide, he has a proven history of guiding investors to stocks and ETFs that provide asset protection, consistent dividends and excellent growth.

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