Rachel’s note: Yesterday, industry veteran Kris Sayce introduced us to the simple, three-step process for the “10 x 10” Approach to investing…
It’s a quick way to learn if your portfolio is well-diversified… whether it will hold up during down times… as well as give you the possibility of 1,000% winners in the process.
If you’re wondering if this approach is for you… you just have to answer one question: Are you a “Have Enough” investor… Or are you a “Not Enough” investor?
Because today, Kris will show us why Wall Street’s many investor labels are meaningless… and why these are the only two “labels” that count when putting your portfolio together…
By Kris Sayce, editor, Casey Daily Dispatch
Wall Street thinks it knows what type of investor you are.
That’s why it creates all those investor labels.
Growth… Conservative… Balanced… Income… Defensive.
The list goes on.
The problem is, those labels don’t mean anything…
And today, we’ll show you why there are only two that matter.
Whether you’re new to the Dispatch or you’re a long-time reader, thank you for reading today’s edition.
In the Dispatch, our goal is two-fold:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by drawing on the ideas of our in-house investing experts: Nick Giambruno, Dave Forest, and the founder of our business, Doug Casey.
Yesterday, we explained the Casey “10 x 10” Approach to investing. Today, we’ll explain what to do next, after you’ve split your investments across (ideally) 10 columns.
And tomorrow, we’ll help you decide which investments to include in your “10 x 10” Approach.
There Are Only Two Types of Investors
Despite all the labels thrown around by Wall Street, there are only two investor types.
Just two. They are:
The “Have Enough” Investor – The investor who believes they have enough saved for retirement, and so they’d like to protect what they have, while trying to make more.
The “Not Enough” Investor – The investor who believes they don’t have enough saved for retirement, and so they’d like to protect what they have, while trying to make more.
Some may argue we’ve oversimplified it…
But we don’t think so.
Wall Street makes a fortune by confusing and bamboozling investors… convincing them that investing is hard and best left to the professionals.
And as for those labels: growth, income, balanced, aggressive growth, conservative, and so on… they don’t mean much at all.
As an example, here are three ETFs (exchange-traded funds) an advisor might recommend to a “value” investor, picked at random:
Vanguard Value ETF
Vanguard High Dividend Yield ETF
iShares Russell 1000 Value ETF
Each appears to be different… as if you’re being catered to.
And based on the names, you might expect these ETFs to appeal to someone who doesn’t want a risky portfolio.
Well, it may (or may not) surprise you to know that these three ETFs include 11 of the same stocks in their top 15 holdings. We don’t doubt that each may qualify as “value”… or that they qualify as “high dividend yield”… or that those 11 stocks are in the Russell 1000.
But we do doubt that investors are getting what they expect.
Why? Well, one of the stocks is JPMorgan Chase. Is it really a “value” stock when it’s nearly at an all-time high? The same goes for UnitedHealth and Procter & Gamble…
Beware Wall Street’s Meaningless Labels
The fact is, the labels Wall Street uses don’t mean anything. So it doesn’t make sense to rigidly use those labels when you choose your investments.
Instead, we recommend using the “10 x 10” Approach we showed you yesterday. Once you’ve sorted your current investments into columns, ask yourself what type of investor you are.
Remember, the objective of both investor types is to make sure you don’t risk more than you can afford to lose. (Using the “10 x 10” columns, you diversify across different sectors and investment types, reducing your risk.)
Do you believe you’ve saved enough for retirement, or do you believe you haven’t saved enough?
With that answer – which you should know without thinking too much – you’ll find it easier to adjust, build, and maintain your portfolio.
Get Ready to Start Filling Your Investing Columns
If you want to focus more on keeping what you already have, perhaps you’ll fill one or more of your columns with your own selection of “value” stocks… Rather than the stocks Wall Street tells you are “value” stocks.
If you want to focus more on growing your investments, perhaps you’ll fill one or more of your columns with growth assets. Wall Street will tell you growth stocks include tech giants like Apple… Microsoft… Amazon… and Facebook.
But are these really growth stocks?
We think not. So what about the alternatives? How about checking out an up-and-coming industry like cannabis for real growth? That’s just one example…
Tomorrow, we’ll shed light on a sector that we think all investors should know about… one that regularly leads to quadruple-digit gains. It’s exactly the 10-to-1 type of shot we’re looking for in our “10 x 10” Approach.
To repeat, there are only two investment types: the “Have Enoughs” and the “Not Enoughs.” Work out which one you are. Then build your portfolio accordingly.
Don’t overcomplicate it.
And if you’re looking for help so you can start right away, stick around. Tomorrow, we’ll show you exactly how to fill those columns.
Editor, Casey Daily Dispatch