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The Online Home of Author and Investor, Dick Young

The Maximizers

“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.

nasdaq vs maximizers

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.

Your Retirement Life: How to Discover Your Small Town

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Originally posted September 23, 2016. Read the entire Your Retirement Life series by clicking here.  You’re about to read the second installment of my brand new series, Your Retirement Life. We are in this together, trying to live a more prosperous, fulfilling life. It ain’t easy. But we can learn from one another. I’d like to hear […]

Is Vanguard too Big?

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Personally, I have had only one minor administrative error recently with Vanguard where they incorrectly deposited SEP-IRA money into my traditional IRA. I called them to explain their error, they pulled up the letter of instruction, recognized their mistake and made the correction. Problem solved. With record inflows of more than $1 billion per day […]

The Best Investing Advice I Have Ever Read

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In my five decades of investing experience, a piece written yesterday by Jeremy Jones, Chief Investment Officer at Richard C. Young & Co., Ltd., is the best I have read. The piece begins: The Dynamic MaximizersSM Portfolio has gotten off to a slow start this year. The Maxis Portfolio is down about 2.4% YTD. That still edges out […]

Meet the Man Behind the Largest Private Investment Fund, Part II

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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 […]

Dow Down Over 1,000 Points

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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 […]

Dow Down 1600 Points, Websites Crash, and Vanguard GNMA

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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 […]

Bitcoin Down 70% from High

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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 […]