A recommended way to slowly build a long term stock portfolio with extra cash. An excellent newsletter that performs in all types of market conditions.
A Newsletter Worth Reading
Stock trading newsletters are mainly garbage. Over the years, I have literally seen hundreds of authors and newsletters come and go with the changing market cycles. The picks of these newsletters hardly ever outperform the average of the SP500. In fact, on average they under perform the SP500 and are hardly ever worth the paper they are written upon. Part of the problem is that the vast majority are long only stocks, and the stock market has basically done nothing but gone up for past 100 years. So why am I even writing about a stock newsletter? Because there is an exception to every rule, and some authors are just damn good at picking stocks. Today’s review is about one of these exceptional stock pickers by the name of Gray Emerson Cardiff with Sound Advice-Newsletter. I know, the name of the author sounds like a stuck up douche bag, but actually Gray is really nice guy. And he is ultra sharp at picking long term cycles.
Why Long Term Cycle Investing
I am an ultra short term trader. And I generate cash flow. My trading style is myopic. I carry a general mistrust of the stock market and believe that the entire structure is a hustle to steal from the weak and give to the poor. Of course, this is not true. Its actually a place where investors come together to expand enterprise and exploit capitalism and commerce. But sadly, I cannot break my idiot mentality, yet I also understand that my suspicions are unwarranted and very faulty thinking. Regardless, I cannot nor will I ever be a long term investor. But I do generate lots of cash. So what to do with my cash?
Investing Extra Cash
As a short term trader, every few months I will typically generate about 5k-10k in free cash. Sitting in the bank is basically an insult. It earns zero interest and yet is being deflated by inflation of typically 3% annually. If you believe government figures of 3%, then you are probably a bit naive. In truth, its probably closer to 5%. So do I buy gold as a hedge against inflation? Sometimes I do. But the problem with buying an ounce of gold is that you typically will spend $80 per ounce in commission over the spot price. It earns nothing, certainly is pretty to look at, and acts as a bank account of last resort. But in truth, precious metals are really just a hobby. So what to do with extra cash? I maintain a stock trading account at Interactive Brokers. I use this account to randomly pick up a few shares, here and there, that are recommended by Sound Advice Newsletter. In total, there are typically 20 stocks in the portfolio. I will buy a few shares and just forget about it. The advantage of Interactive Brokers is that you can keep your cash parked for free, and buy or sell stocks at $1 a trade. Broker like Schwab charge $5 to $8 per trade. Might not seem like much, however if you are only purchasing 2 shares of 10 different companies, then the Schwab route is too expensive. Interactive Brokers is the best route for passive cash, savings investor.
Performance Of Sound Advice
Sound Advice is well diversified. It does well in up markets, and it does well in down markets. It does well in high interest rate markets, and low interest rate markets. Inflationary and deflationary, high fuel prices and low fuel prices. The bottom line is that your money will grow slowly and steadily and will do OK in all sorts of markets. I can say this with confidence because Gray has been doing this for 20 years and his performance is proven across a wide variety of investment climates. The key as an investor is to just slowly throw extra cash at his picks, and do it as cheaply as possible.
Big Trend Indicators and Common Sense Approach
Gray has created some unique indicators that only use fundamental data. Things like the difference between stock prices and the cost of an average house, or the cost of oil vs natural gas. The way he describes his indicators are just common sense approaches to markets. And he is not a a long only stock picker. In fact some are quite contrary, depending on your perspective. For instance, he has been recommending an ETF that gains value as interest rates rise. Sure, we know that rates are going to rise, but try and time that market! Well, he includes these scenarios in the portfolio. And other big trend, common sense type picks like buying the worlds largest miner of copper. The world cannot live with copper, and sure copper is in a bear market, but Gray got us into a stock that yields a nice fat dividend that reduces the pain of falling share price. I highly recommend that if you are sitting on free cash at the bank, take at look at slowly building a portfolio of stocks, it just works.
A Typical Monthly Portfolio
Contained within the newsletter you will see a grid of all of the picks. He also includes a limit price, so make sure you pay less than the limit price.
Low Price And Loaded With Value
Firstly, he offers a risk free trial of 4 months. By the 2nd month, you will really begin to see the value of his approach. At the end of the four month trial period, you will gently be given the opportunity to subscribe at $85 dollars for 15 months. Every month, in the face of all the geopolitical BS, global warming, wars, droughts, famine, ebola, wild stock markets, debt defaults, plunging or increasing oil prices, wars and terrorism, interest rate indecision…you will receive a news letter that very calmly sits you down and explains everything that is happening and where you should be investing. For the frenetic day trader like myself, this guy is a godsend. Else my free cash would just be wasting away, slowly being eaten away by inflation.
Contact Gray today. Sign up for the newsletter, it wont cost you a penny.
Thanks for reading, and sorry If I am gushing all over myself about this newsletter, I just find a lot of value in this guy. Once again, thanks for reading and make sure to leave comments or questions below.