When the 59-year old head of Softbank, Masayoshi Son, met with the 31-year old deputy crown prince of Saudi Arabia, Mohammed bin Salman (MbS) for 45 minutes in Tokyo, MbS committed $45 billion to Son’s Vision Fund. “Forty-five minutes, $45 billion,” Son said in September. “One billion dollars per minute.” That caught the attention of […]
“Meltdown? Absolutely baked into the cake as I write to you, and becoming more of a deep midterm concern for me as time passes,” wrote Dick Young in Intelligence Report back in July 2015. And here we are a short way into 2016 and the speculative NASDAQ index is down over 8%. As Dick notes, “In recent issues, my goal has been to work especially hard at providing you intelligence that will keep you safe and dividend-centric during what I consider the inevitable coming meltdown.”
Safe and dividend-centric—sort of has a ring to it, does it not? It does to me. Those words have been pounded into my head for all the years I’ve worked with my father-in-law, Dick Young, founder, and with my brother-in-law Matt Young, president and CEO of Richard C. Young & Co., Ltd. In addition to our family bond, the three of us studied, at different times, at our shared alma mater, Babson College. But it was Dick who studied charts (much to the dismay of his teachers, I’m guessing) as a student at Shaker Heights High School. As you can see, there’s a lot of history when Dick writes, “I have tweaked my original work on dividends and interest, along with my long-time interest in gold (I have held my original 1982 China Gold Pandas for decades) to produce what I call the ‘Maximizers’.”
The Maximizers is a diversified portfolio, a “Retirement Ark,” if you will, of dividend-paying and dividend-increasing (for 10-consecutive years or more) common stocks, high-grade bonds, and gold. A simple enough sounding strategy for sure, but a strategy that is difficult to follow, especially in times like these when legendary investor Jack Bogle would likely advise the twitching masses to “just don’t do something, stand there.”
And stand there should you, as Yoda might say. Because it is my belief that you might lose a couple battles here and there with a Maximizers styled approach, but you will win the war. An inside baseball look reveals that the speculative NASDAQ beat the Maximizers in 8 of 15 years this century, versus 7 outperformers for the Maximizers. A pitcher with a 7-and-8 Major League Baseball starting record would be banished to the bullpen. But despite a 7 and 8 record, the final results have been incredible over the complete 21st Century.
The Maximizers win by a long shot. At the same time, the Maximizers offer you the peace of mind and comfort you deserve. The maximum deviation between the best and worst year for the Maximizers is a tiny 10 percentage points. For the outgunned and outmanned NASDAQ, the deviation is an unsettling, if not breathtaking, 91 percentage points. And the bone-chilling NASDAQ record includes five down years, four of which were bruisers. No half-sensible retirement investor is going to sign on for that backbreaking volatility. Never forget Dick Young’s cardinal rule of portfolio crafting: Always analyze risk before worrying about potential returns.
How do you lose most of your wealth in the dot com bust and then rise from the ashes to become one of the 100 richest people in the world? Good question. Meet Masayoshi Son, the 59-year-old head of Softbank, an investment company that raised $100 billion last year alone for its Vision Fund. In […]
“Monday’s madness is a reminder that investing in stocks doesn’t automatically make people rich. Twice in the past 20 years—between 2000 and 2002, and again between 2007 and 2009—the stock market has cut investors’ wealth roughly in half,” writes Jason Zweig at the WSJ. When you think about the mathematics of investment losses (see chart […]
What great news for me and for you if you are actually an investor. I mean a real, seasoned investor. One who embraces common sense, patience and the acuity that comes with decades studying the power of consistent cash flow matched with the most powerful word in investing: compounding. My business is, as are my […]
When stocks were down 1,600 points yesterday, “The websites of two of the country’s biggest robo-advisers—Wealthfront Inc. and Betterment LLC—crashed,” reports Bloomberg. I’ve never been comfortable with the idea of robo-advisers. What if the technology ends up not working? Will the so called robos have the skill and patience that I know I have? Who […]
A central bank official quoted by the Wall Street Journal‘s Steven Russolillo and Andrew Jeong referred to bitcoin as the combination of a bubble, a Ponzi scheme, and an environmental disaster. That trifecta is only a symptom of the frenzied buying of bitcoin in recent months, followed by the somewhat predictable sell-off. Central banks are […]
The price of bitcoin is plunging as regulators begin to recognize the real threat alternative currencies pose to their fiat currencies and begin to fire back with restrictions. Between new regulatory scrutiny, and the threat of hacking, bitcoin investors are beginning to find better places for their money elsewhere. The neck-snapping volatility of bitcoin prices […]
Originally posted August 1, 2014. In my monthly Richard C. Young’s Intelligence Report (IR), I cover all my portfolio top picks, including regular intelligence on precious metals. I concentrate not only on personal finances but also on personal security issues. As such, I regularly discuss my favorites in the personal security area. In this series, I […]
For years I’ve been writing about how badly pension funds have been ignoring reality when it comes to return expectation (read a sample of these posts here, here, and here). Funds have a choice to make when they set their return expectations, they can: Shoot low, and require governments or companies to put more funding […]
I’ve always been amazed at how quickly investors forget what it feels like to lose money. One of my favorite economists, whom will remain unnamed, is a constant stock market cheerleader. He’s never met a market he hasn’t liked. I love his optimism and I too believe, like he does, that Trump’s tax cuts will […]