You may have read Rich Man, Poor Man—one of my favorite pieces ever written by the late great investment writer Richard Russell. It’s one of those timeless pieces that makes me feel like he’s still with us. And with the passing of President George H.W. Bush, I’m reminded of the sacrifices of the “Greatest Generation” […]
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.
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.
This New Trend Could Change Ecommerce as We Know It
Amazon is moving into advertising in a big way. The implications and opportunities of such a shift are profound, but there are also risks. Will consumers accept ads on Amazon’s platform? If they do, what does that mean for small businesses on Amazon’s platform? How will big businesses use the platform? What does this mean […]
Most People Aren’t Measuring Performance Correctly: Here’s How
When you measure performance in your portfolio, are you getting the right picture? If you are like most investors, the answer is no. Here is what I wrote in December 2013 about how you should be measuring performance: Cycles and Investment Success Understanding cycles is vital to your long-term investment success. Most folk intuitively understand […]
Brilliant Investors Know: Cash Flow & Compounding Rule!
Retired or retiring not too far down the road? You will be a winner if you are “the ultimate patient investor.” To be a genius in the financial markets you need a steel-trap grip on the single concept that virtually guarantees long term financial security. The strategy is based on Einstein’s miracle of compound interest. […]
Are You a Shepherd or a Gunfighter?
Before you answer, remember that at least 50% of gunfighters end up dead. Are you the type of person who will dutifully grow your investment portfolio over the years by shepherding it in the right direction? Or will you risk it all in one high risk gunfight after another until your number is called? Consider […]
My Concentration Is on Full Faith & Credit Pledge U.S. Treasuries
As Wall Street tumbles, my concentration is on full faith and credit pledge U.S. treasuries. Reuters‘ Caroline Valetkevitch reports on the market: The Nasdaq fell 3 percent on Monday as investors dumped Apple, internet and other technology shares. Shares of Apple Inc fell after the Wall Street Journal reported the company had cut production orders in […]
Are You About to Retire Broke?
Most Americans are simply not saving enough. GOBankingRates released a survey this week showing that 42% of Americans will retire broke. Hopefully, that doesn’t include you, but even if you have been saving, it’s a good bet you could do more. In July 2014, I explained to readers why they should boost savings. Boost Your […]
The Historical Primacy of Dividends
In July 2011 I wrote: On page 480 of 1962’s Security Analysis by Graham, Dodd, and Cottle, I underlined the above header. Since that time, I must have worn out a thousand red pens underlining books, but rarely are they investment books. I have never required another book on investing. I have since read a […]
Here’s How You Should Approach Investing in China
The China Household Finance Survey run by Gan Li at Chengdu’s Southwestern University of Finance and Economics, recently found that one fifth–that’s 20%–of Chinese homes do not have occupants. Instead these homes are owned as investments in what could be one of the world’s most distorted markets ever. Back in February of 2012, I wrote […]
The Best Investment Strategy is Simple, Like Analog Music
Four years ago, I told readers the story of David L. Stone, the manager of Beacon Hill Fund. The point of my story then, as it is now, was to encourage investors like you to avoid speculation, and instead to be patient with your money. Use simple strategies you can stick to in good times […]
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