Consistent Low-Risk Income: A Pipedream or Within Your Reach This Week?

Generating income can feel like a bit of a wild goose chase…

Trying to find the smartest way to safely and steadily, that is.

Sure, you want to consistently build your wealth over time — but without the headache of worrying about high, unpredictable risks.

You’ve likely seen a ton of options floating out there…

Everything from:

  • Buying dividend-paying stocks.
  • Government bonds.
  • Fixed-income securities (like CDs and money market funds).
  • Real estate investment trusts (REITS).
  • Owning rental properties.

This is just to name a few.

And these may be touted as promising investments. But digging deeper, you’ll discover that each of them comes with its own drawbacks and varying degrees of risk, which can get complicated real quick.

For many of us, some of these mean more trouble than payoff.

That’s why we wanted to make it simple for you…

We’ve asked Money & Markets Chief Market Technician Michael Carr, to come up with a solution to share with our readers…

To tell us what he believes is a much better way to secure consistent cash flow, regardless of the state of the economy, or if the market is crashing, soaring or lugging sideways.

Mike’s response was nothing short of impressive.

He’s put together a reliable trading technique that has demonstrated a 95%-win rate. It has delivered weekly payouts from low-risk trades that were closed within a couple of days.

And it’s part of his algorithmic system he calls “Accelerated Income” — just one of his many breakthroughs as a successful systems designer and trader.

Mike’s been trading the markets for 30+ years. He was a hedge fund manager who grew his former firm from $80 million to $220 million in about a year and a half.

He is also a military veteran who coded radar systems to control our nuclear armament. As one of the military’s top computer scientists, he built technology for billion-dollar firms, which to this day influence both Washington, D.C. and Wall Street.

His extraordinary experience on both the financial and military fronts — and his high-level dedication to precision — has led him to create a system you won’t find anywhere else. One that has the potential to grow an account 199% in a single year.

We want to make sure you have the opportunity to see this as soon as possible.

In a few days, Mike will show you how to start benefiting from his Accelerated Income system for the chance to take home consistent, low-risk income each week.

Just go here to get on our early-access list for his Accelerated Income Summit” — happening this Thursday, April 25, at 1 p.m. ET.

You won’t want to miss this.

Happy Sunday,

Your Banyan Edge Team

The Fog of Markets & War: We Trade Like Mike Tyson Fights

On Saturday, Iran launched an unprecedented attack against Israel.

It seemed like a well-planned operation. Suicide drones, ballistic missiles and cruise missiles were launched from several locations. The plan was most likely an attempt to overwhelm Israel’s air defense systems … and it failed.

Israel and its allies prevented 99% of the drones and missiles from reaching their targets.

This kind of outcome is fairly typical in military actions.

More than 150 years ago, Prussian Field Marshal Helmuth von Moltke wrote: “No plan of operations extends with any certainty beyond the first encounter with the main enemy forces.”

Mike Tyson explained the concept in simpler terms when he said: “Everyone has a plan until they get punched in the mouth.”

Iran’s weapons were punched in the mouth by an Israeli-led coalition of forces. With that, the fog of war, which perpetually hangs over the Middle East, thickened.

“The fog of war” is associated with another Prussian Major, General Carl von Clausewitz, who explained: “War is the realm of uncertainty; three quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty.”

Military leaders around the world understand these principles. That’s why they train their troops. Once the shooting starts, they expect their troops (the individuals facing fire) to adapt to what they see in real time.

There’s an important lesson here for investors — but it’s not the obvious one…

How to Battle the Fog of Markets

Many investors think of a market selloff as the fog of war.

They hold fast, believing that’s what they need to do. After all, they know stock prices always come back. And besides, they bought quality companies.

So, what could go wrong?

Well, everything.

You see, stock prices don’t always come back.

Many of you are old enough to remember Enron. That one-time high-flier never came back because the company went into bankruptcy.

As it was flying high, almost everyone believed Enron was a quality company. Its earnings were growing. Management said all the right things. Yet few investors understood the company was a fraud.

Enron is a memorable example. But there are many other stocks that never came back. That includes high-quality companies that were, in fact, far from being frauds.

Yahoo stopped trading in 2017 more than 50% below its all-time high. Sears went bankrupt in 2018 after falling 99% from its 2007 high. And Bear Stearns fell from more than $170 to less than $10 in the 2008 financial crisis.

Instead of digging in, investors need to react to the changing environment.

In other words, we need to think like Mike Tyson instead of pretending we’re Warren Buffett.

Tyson adapts to what he sees in the ring. If he’s getting hit by hard rights, he protects his left side. If he finds his opponent leaves his left open, he throws more rights.

This might differ from what Tyson expected. But that doesn’t matter. Tyson’s goal is to win. Sticking to the same plan won’t help him beat adversity.

This is the lesson investors need to carry them through the fog of the markets.

One way to adapt to the market environment is to know when you’ll sell.

Investors in Enron, Yahoo, Sears, Bear Stearns (and every other delisted stock) had many opportunities to exit with smaller losses. Unfortunately, too many stubbornly held on to the bitter end.

Another way to survive (and profit) through the uncertainty of the market is to trade short-term strategies that adapt to the market action.

Adapt, Win, Repeat

My Precision Profits subscribers trade like Mike Tyson. We’re adapting to the market action every day — just like Tyson adapts to every round.

One of our trading strategies — the Opening Range Breakout (ORB) — holds positions for just two hours … or less. And it’s had a pretty active month.

In the first half of April, we’ve locked in 13 trades. Eight of them were winners, and five of those were for a 50% gain or more.

So far this month, a $1,000 allocation to the strategy would have generated $593 in profit. This comes at a time when the S&P 500 is down 3.5%.

Better yet, ORB is designed to excel when stocks are volatile.

It’s a strategy every investor should consider as we move into a time when global events — like warfare attacks — might increase the risks of a buy-and-hold strategy.

Of course, ORB is just one of my favorite battle-tested tools for growing profits.

I’m constantly looking for a new edge to help my readers make additional money in any type of market.

That’s why I’m about to open access to my income strategy … one that I’ve spent the last couple of decades refining to achieve stunning results.

I’ll even be using my own $30,000 account to target $78,000 with this strategy over the next year, to show just how confident I am about this system’s performance.

I’ll be sharing the full details of how you start using it with me next week. So remember to grab your free spot to my Accelerate Income Summit” — on April 25 at 1 p.m. ET — right here.

Regards,

Michael Carr's Signature
Michael Carr
Editor, Precision Profits

Peter Lynch’s Wisdom for Seasonal Trading

Spring brings with it the perfect opportunity for a fresh start — not just for tidying up our homes — but also for assessing and revitalizing our investment portfolios.

And for our portfolios, we can take a cue from legendary investor Peter Lynch.

He’s renowned for his exceptional management of the Fidelity Magellan Fund, which achieved remarkable returns during his tenure from 1977 to 1990.

While the S&P 500 Index delivered an average annualized return of about 11% over the same period, Lynch nearly tripled that, boasting an impressive average of around 29% per year.

His success wasn’t built on complex theories or intricate algorithms.

Rather, it was simple, timeless principles that allowed Lynch to achieve stunning results…

“Water the Flowers, Cut the Weeds”

One of Lynch’s most famous phrases — “water the flowers and cut the weeds” — captures his philosophy on portfolio management.

Just as we tend to our gardens, nurturing the flourishing plants while removing the unsightly weeds, investors should focus on fostering successful investments while pruning or eliminating the underperforming ones.

Seasonal trading helps us to do that, although it goes beyond simply heeding Lynch’s advice to “cut the weeds,” and not the flowers.

Seasonal trading involves recognizing recurring patterns in the market’s behavior throughout the year. That’s what I do in Apex Alert.

For example, the “January Effect” is a well-known seasonal pattern, where small-cap stocks tend to outperform large-cap stocks in the early months of the year.

Of course, I’ve identified many other, more sophisticated patterns that occur throughout the year and give us the chance to collect profits.

Our Next Seasonal Trades 

This week in Apex Alert, we are closing a position in Sprouts Farmers Market, Inc. (Nasdaq: SFM) for a gain of about 20%. We added this stock in February, which was the ideal time to buy stocks in the food sector according to my research.

This year, we achieved a gain of about 9X that of the S&P 500 with this trade. And we’ve had six other trades so far that have also been winners.

Understanding these seasonal patterns — and knowing the optimal times to enter and exit them — allows us to continually maintain our portfolio, keeping it filled with flowers and pulling any weeds quickly if they appear.

We have new seasonal opportunities every six weeks, on average, throughout the year. Apex Alert readers already know the dates of these trades and which sectors to focus on during these profit windows.

Our next buy signal in the tech sector is right around the corner.

To learn how you can benefit from the latest profit season by jumping into our next Apex trade that I’ll be releasing this Monday — just go here.

Regards,

Michael Carr's Signature
Michael Carr
Editor, Precision Profits

The Millennial Generation Will Fuel the Dow’s Surge to 100,000

The Dow Jones Industrial Index (DJIA) is heading to 100,000.

As I mentioned last week, AI is a huge part of it.

But there’s another reason…

It’s thanks to demographics, the data used to look at populations as a whole.

Demographics indicate some significant shifts as the millennial generation hits their peak earning years.

Each generation follows a different lifestyle. What matters most as an investor is how each generation spends their money.

Following the spending trends of any generation as they hit their peak spending years can lead to better market returns.

It can mean the difference between making 200% to 300% in a decade just following the index, compared to earning as much as 5,260% in 10 years.

Done right, following a generation’s peak spending years can make you a millionaire.

Knowing which generation is on the rise and how they spend can have huge investment implications.

And investing in the right companies can make a huge difference in your wealth over a lifetime.

How Following the Baby Boomer’s Spending Trends Led to the Market’s Winners

To understand the future, let’s take a look at the past, starting with the baby boomers.

They’re the group born between 1946 and 1964. The boomers born in 1964 are turning 60 this year. It’s safe to say this generation is either in, at or near retirement.

And what a run they’ve had!

As the boomer generation grew up, some industries saw massive growth at different stages of their life-cycle.

Toymaker Mattel (NYSE: MAT) was a big winner in the 1950s. Media giant The Walt Disney Company (NYSE: DIS) was the best-performing S&P 500 company between 1950 and 1980, soaring over 800%.

There were some growing pains along the way…

The boomer generation started to earn money in the 1960s and 1970s but had to contend with high inflation and soaring commodity prices. The 1974 bear market was a brutal 50% pullback, combined with double-digit inflation. Ouch.

That may have pushed that generation to look for reasonable everyday prices. It should be no surprise that retailer Walmart (NYSE: WMT) soared 5,260% during the 1980s as the last of the boomers became adults and started spending.

As the boomers entered the workforce full-time and began to save and invest, financial services soared to cater to their needs. Between 1950 and 2000, financial services quadrupled to over 8% of GDP.

Financial Sector's Share of GDP (8.4%)

The stock market saw some of its best returns in the 1980s and 1990s thanks to this shift.

In 1950, the percentage of Americans who owned stocks stood at just 6%. By 2000, it peaked at 61% — just as the first of the boomers hit their mid-50s.

So it’s clear that the boomer generation’s spending included a mix of material things as well as investing in financial assets over the years.

That combination allowed the Dow to soar from 3,500 in 1980 to 20,100 by the year 2000.

Dow soars from 3,500 in 1980 to 20,100 by the year 2000

Amid that trend, again, specific stocks did even better.

Warren Buffett’s Berkshire Hathaway (NYSE: BRK-A), a conglomerate that largely owns insurance other financial companies, rose 4,490% in the 1980s. Since 1965, it’s beaten the S&P 500 by 120X!

Investing in some of the top-performing stocks that play to those spending trends can mean the difference between earning 150% to 200% over 10 years — or 4,400% to 5,260%.

Good news: Catching the right stocks at the right point of the millennial’s peak spending cycle should see similar results. And why Dow 100,000 is in my sights today.

The Millennial Shift: Experiences & Tech Over “Things”

Today, the millennial generation is on the rise and entering their peak spending years.

That has huge implications for the market going forward.

For starters, the millennial generation is a slightly larger group than the baby boomers. Millennials number 72.1 million compared to 71.6 million boomers.

On the spending side, millennials are behind boomers in housing spending. 42% of them are homeowners by age 30, compared to 51% of boomers.

Part of that lower spending on housing may reflect the fact that median home prices have soared in real terms since 1970, when the earliest boomers began buying homes.

Median Home Prices 1970 - 2022

By today’s standards, a home is about 66.7% more expensive in real dollars than in 1970.

Sounds like the kids are just making a wise decision by buying other assets instead.

By living with their parents longer, millennials have been able to spend and invest money that would otherwise have gone into housing.

Recent studies show that millennials have no issue with earning, spending and even investing.

64% of millennials are currently invested in the stock market, slightly above the average for all Americans (61%).

Of those investors, 65% say they’re faring above average, thanks to their increased willingness to invest heavily in tech stocks.

That may include many of today’s well-known companies like Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL).

However, you may not always want to invest in a company just because it seems to cater to millennials.

Adam O’Dell, our systematic investment expert at Money & Markets, just pointed out in Friday’s Banyan Edge that, since its IPO, investment app Robinhood (Nasdaq: HOOD) has declined 45%.

However, another tech-heavy investment platform that he recommended for his Green Zone Fortunes members is up nearly 80% over the same period.

While millennials are spending less on homes and even cars, they are willing to crack open their wallets to travel. Investors may be surprised by the performance of hospitality and tourism stocks in the years ahead.

While millennials favor experiences over things, they’re also a tech-savvy generation. They grew up during the rise of the personal computer and internet boom.

So when it does come to shopping for things, they’ve massively embraced e-commerce. Investors may not want to overlook opportunities to play to that trend, even in mega-caps like Amazon (Nasdaq: AMZN).

Next, millennials are benefiting from today’s technology booms in everything from AI and cryptocurrencies to EVs and green energy.

As I mentioned last week, the AI boom is likely to fuel a productivity boom at least as large (likely larger) than the internet.

And millennials have already adapted quickly to these new technologies. The latest jobs created to address this new tech trend will primarily go to that generation and pay well, increasing income for millennial workers to travel and invest further.

Today’s AI technologies can help give America’s economic growth a shot in the arm.

The shift to a generation that’s grown up comfortable with today’s technology may help accelerate the development of even more new technologies.

That’s why the rise of millennials could mean that markets have a massive bull run in the coming years.

Investors who invest in the right travel and tech stocks stand the best chance of beating the market’s returns even further.

The Demographic Shift Won’t Impact Dow 100,000

I’ve made it clear that I’m already targeting Dow 100,000, even if it’s “only” near 40,000 today.

From 40,000, the Dow has to rise 150% to hit 100,000. That’s easily achievable, especially if we’re in the early stages of an AI-driven tech stock boom.

Yes, we’ll have our ups and downs on the way there. But we could be there before the decade is out.

That’s because the markets are now being driven by new technologies such as AI, cryptocurrencies, automation, EVs, you name it.

These are the next generation of tech companies. The ones that will be added to the Dow in the years ahead and help it soar to 100,000 and beyond. And where millennial investors are flocking today.

Adam O’Dell calls these companies “Tech Titans.” He just released the latest research on them, and how their growth can play out in the years ahead.

Sounds like the stock market will be just fine.

Yes, there are some generational differences between boomers and millennials.

Millennials are a bit more averse to having debt. And they’re behind other generations in terms of buying homes. They spend less on things and more on experiences. But they’re still earning, spending and investing.

Understanding those differences can help you navigate these investment opportunities as millennials hit their peak spending years — and send the Dow to 100,000.

So whether you’re a millennial or not, their spending trends could make you millions.

Our experts at Banyan Hill will continue researching the best investment opportunities as this demographic trend plays out … all while making investing safe, easy and fun.

Aaron James

CEO, Banyan Hill, Money & Markets

Read This Before Buying any Bitcoin ETF

In January 2024, the Securities and Exchange Commission (SEC) made it legal for financial companies to release exchange-traded funds (ETFs) that can track the price of bitcoin.

In this article, I’ll break down why you should avoid buying a Bitcoin ETF at all costs – as well as my thoughts on why BTC is set to rally.

3 Reasons Why You Should Never Buy a Bitcoin ETF

They Charge Unnecessary Fees

A Bitcoin ETF is essentially just a financial tool that tracks the spot price of Bitcoin while charging you a fee to do so. But…you can easily do this yourself by opening a crypto wallet and buying Bitcoin. So, why would you pay another company to do it for you?

According to Nerdwallet, most Bitcoin ETFs charge between 0.5% to 1.5%. Now, you might think that these financial institutions are using some sort of secret strategy when tracking Bitcoin’s price. Right? Like, maybe they have a special crypto wallet that uses ultra-safe encryption technology. Nope. According to Nerdwallet, most Bitcoin ETFs on the market use Coinbase (Nasdaq: COIN). Again, this is easily something that you could do yourself – for free.

I guess it’s true that some BTC ETFs invest in futures while others invest in Bitcoin mining stocks. So, buying a Bitcoin ETF for the sake of tracking all of the BTC mining stocks might make a bit of sense. But, if you’re solely interested in getting exposure to Bitcoin then it makes zero sense to buy an ETF.


Now, I know what you’re thinking. Some of these ETFs have really cool names, like the “Bitwise Bitcoin Strategy Optimum Roll ETF”: (NYSEARCA: BITC). With a name like that, this ETF must have a unique trading strategy that outperforms Bitcoin, right?

Wrong.

Bitcoin ETFs Underperform BTC

I checked the 6-month returns of Nerdwallet’s Top 10 Best ETFs and, guess what? All 10 of them have underperformed Bitcoin’s return over the same period.

I know this is a bit of a small sample size. After all, a 6-month window isn’t very long. There’s a chance that these funds will go on to outperform BTC over the next 1 year, 5 years, or 10 years. But, I doubt it. Over the past 6 months, most of these ETFs weren’t even close to mirroring BTC’s return. They have all underperformed BTC by 20-30% or even more in some cases.

So, again, you’re essentially paying a company a fee to underperform the return of Bitcoin. On top of that, buying a Bitcoin ETF goes against everything that Bitcoin stands for.

A Bitcoin ETF is Against Bitcoin’s Ethos

If you’re a fan of Bitcoin and the decentralized finance movement then you know that bitcoin is all about people regaining control over their money. Right now, money is controlled by the government, central banks, and consumer banks.

  1. The government takes your money through taxation
  2. The central bank devalues your money through inflation
  3. Consumer banks determine what you can or can’t do with your money.

Whenever you want to do something with your money, one of these three entities is standing by to make your life difficult.

Didn’t pay enough taxes? Here’s the government ready to audit you and demand all of your financial information.

Saving money so that you can buy a home? Well, the Fed raised interest rates so now you can’t afford the mortgage.

Want to send money to a friend? The bank says you have to wait until Monday.

The main purpose of Bitcoin is to solve issues in our financial system and eliminate financial middlemen. In doing so, Bitcoin gives you more control over your finances. If you buy a Bitcoin ETF then you’re just perpetuating the system that already exists. Bitcoin might not be a perfect solution to all of the problems I listed above. But, it’s the best alternative we have if we want to regain control over our money.

That said, even though I’m opposed to buying a Bitcoin ETF, I still think buying Bitcoin is a great idea. Here’s why.

Bitcoin’s Pending Surge

TLDR: Trillions of dollars will soon be invested in BTC = prices goes up.

The SEC’s decision to allow Bitcoin ETFs has ushered in a new age for the cryptocurrency industry. With this new rule, Bitcoin is no longer a fringe asset that’s used by drug dealers to launder money. Instead, BTC is officially a legitimate financial product that’s certified and approved by the world’s biggest financial institutions. This is a massive context switch.

During its initial announcement, the SEC said that it approved 11 applications for BTC ETFs. Over the coming years, I’m sure that dozens more funds will enter the industry. This means that wealth advisors around the world are starting to advise their clients to buy Bitcoin and other crypto assets. This will trigger a massive influx of money into BTC.

Visual Capitalist estimates that there are 59.4m millionaires in the world. These people make up just 1.1% of the world’s population. But, they account for roughly 45.8% of the world’s wealth – which is approximately $210 trillion. The overwhelming majority of these millionaires do not manage their own wealth. When you think of the average millionaire, you conjure up images of:

  1. Trust fund kids whose family owns businesses, real estate, or similar assets
  2. Famous celebrities like actors, athletes, singers)
  3. High-paid professionals like doctors, lawyers, CEOs

Do you really think any of these personalities are sitting around managing their own wealth? Absolutely not.

Imagine The Rock balancing his portfolio each quarter. Or, America’s top brain surgeon buying shares of $VOO on Robinhood (Nasdaq: HOOD). Not happening. For the most part, wealthy millionaires have someone else manage their money. Usually, a family office or similar high-end wealth management service. I’m talking about the types of investment firms that require $50 million in assets just to schedule a meeting.

Over the coming years, these private family offices will start to recommend BTC ETFs to their clients. This will result in trillions of dollars of privately managed wealth pouring into Bitcoin – likely resulting in a massive spike in price. Even if just 1% of privately managed wealth is invented in Bitcoin, it will result in $2.1 trillion flowing into BTC over the coming years.

I feel especially strong about this, thanks to the great wealth transfer.

Will BTC Replace Gold?

I have a very strong conviction that Bitcoin will eventually replace gold as the world’s default “safe haven” investment. I say this because America is currently undergoing the greatest wealth transfer of all time.

Over the next two decades, Baby Boomers will transfer $84 trillion to their kids (Mainly, Millennials and Gen Z). This means that many younger generations will suddenly find themselves responsible for investing the family fortune. And, they’ll likely show a stronger preference for Bitcoin and crypto than their parents did.

Most advisors recommend keeping between 5% to 10% of your portfolio in gold. These talking points have been repeated so often that few people dare to question them. However, I think this mentality will gradually start to change over time. After all, how many younger investors are really interested in buying gold? For the most part, they only do it because “it’s what you do.”

But, you can’t spend gold. It barely increases in price (compared to other assets). You can’t even really use it, outside of jewelry or fashion pieces. BTC, on the other hand, can be easily transferred, spent, sent to friends/family, and has proven to increase dramatically in value over time. For these reasons and more, I believe that BTC will eventually replace gold as the default “safe haven” investment.

Anyway, I hope that you’ve found this article valuable when it comes to learning why you should never buy a Bitcoin ETF. If you’re interested in reading more, please subscribe below to get alerted of new articles.

Disclaimer: This article is for general informational and educational purposes only. It should not be construed as financial advice as the author, Ted Stavetski, is not a financial advisor. 

The post Read This Before Buying any Bitcoin ETF appeared first on Investment U.

Smart Money Is Moving Into Oil Amid Rising Global Tensions

With the election approaching in November, the news is dominated by stories about politicians and filled with the latest policy statements and missteps of the presidential candidates.

But other stories could be even more important to U.S. consumers.

You’ve likely seen the headlines. There are two major wars underway right now:

“Tehran, Hezbollah vow ‘revenge’ against Israel…”

“Drones Strike Deep in Russia, as Ukraine Extends Its Weapons Range”

These wars can escalate — and history shows they can intensify in unexpected ways, at unpredictable times.

Wars can also lead to stories no one sees coming. That makes sense. Even the smartest weapons can miss their target and cause damage to the people and infrastructure they are trying to protect.

A recent example of that can be seen in this headline:

“Damage to Cables Under Red Sea Highlights Mideast Conflict’s Broader Threat”

Many missed that story, but it’s an important one. The New York Times wrote:

Mysterious damage to vital communications cables under the Red Sea has raised concerns about whether the conflict in the Middle East is now beginning to threaten the global internet.

Just as the waters off Yemen hold crucial shipping lanes, they are also a critical location for undersea cables that carry email and other digital traffic between Asia and the West. Around a dozen cables run through the area, and more are planned.

These bundles of glass fibers, about as thick as a garden hose, “are extremely important,” said Tim Stronge, vice president for research at TeleGeography, which analyzes the telecommunications market. “Over 90 percent of all communications traffic between Europe and Asia goes through those” cables.

Experts believe the damage was likely caused by Yemen’s Houthi rebels.

Before last month, few of us would have thought the internet was at risk from a war waged by non-state actors. Now, we all realize we live in an age of asymmetric warfare, where smaller groups can cause damage that affects thousands, even millions of innocents.

We’re also starting to realize that the risks aren’t going away. This has important implications for investors.

War in the Middle East can quickly escalate, cutting off oil flows from a critical region. War in the Ukraine also threatens the global oil supply.

The smart money in the oil market has noticed this.

In futures markets, large traders are required to report their positions to regulators. Large traders include hedge funds and commercial users who buy oil to use later.

Commercials include refiners who need a steady supply of oil to produce refined products like gasoline. Other consumer users use oil as a hedge. For example, airlines use oil markets to hedge the costs of jet fuel. Their gains in oil can offset higher fuel prices.

Since October 7, when Israel went to war, commercials have increased their holdings by 18%.

This trend shows that “smart money” is concerned about its supply. Price action confirms this is a valid concern. This week, oil prices reached a six-month high.

With the smart money moving into oil, energy stocks have also moved to six-month highs.

Now could be an ideal time to consider oil stocks — before bad news sends the sector to higher highs.

Adam O’Dell has been tracking this sector and discovered one of the best ways to invest in oil’s bullish run. He’s sharing his top oil stock recommendation set to soar. Go here for the full details.

Regards,

Michael Carr's Signature
Michael Carr
Editor, Precision Profits

The Biggest Tesla Sales Drop Since 2020

The headlines tell the whole story…

“Tesla is losing its grip on the electric vehicle (EV) market…”

“Tesla and BYD sales fall as concerns mount over electric shift…”

It’s not looking good for EVs right now.

If you were an Alpha Investor, you already knew this — one year ago.

And you’d be investing in mega trends like fossil fuel and AI that were headed higher … instead of EVs and renewables, which were a dead end.

Here’s my first interview on the EV delusion with physicist Mark Mills, which took place on May 3, 2023.

Mills shared with my readers why EVs were aspirational and not going to succeed.

You’ll see here why everything continues to point to higher oil prices … not higher EV sales. What he shared with me is still relevant a year later.

(Or you can read the transcript here.)

Ready to Invest Now?

Fossil fuel is here to stay … at least for the next decade at a minimum, if not longer.

And as an investor, this is something you need to take action on. Don’t wait until next year.

See what I recommend here.

Regards,

Charles Mizrahi

Charles Mizrahi
Founder, Alpha Investor

This New AI Trend Could Help You Buy a New Home


Editor’s Note: Today, we’re exploring how AI is shaking up the real estate sector. The company Ian highlights today plays right into this trend, even though it’s not part of any of his portfolios.

However, if you’re ready to invest in AI, Ian has revealed his top AI stock for 2024 — along with six others he believes will thrive from the growing AI boom. Learn more about them here!


If you’re thinking of buying a home this year, then this new AI trend is exactly for you.

There’s a mini revolution happening for homebuyers and sellers, especially as years of pent-up demand for construction could lead to a massive wave of homebuilding in 2024.

The Federal Reserve is also likely to issue more than one cut to interest rates this year, creating even more potential homebuyers.

And the company we’re highlighting today is taking advantage of this demand — by utilizing AI machine learning to provide a more efficient way for you to find a new home.

This real estate company is a publicly traded subsidiary. (We even name-drop the stock name and ticker for you!)

It has its own proprietary AI platform that includes AI-powered home search, pricing tools, evaluation, local agents, equity tracking, potential cost savings and more — all available to both sides of the home-buying experience.

Dive into today’s video to learn more…

(Or read the transcript here.)

🔥 Hot Topics in Today’s Video:

  • Market News: What’s going on with the housing market? Pent-up demand, years of “underbuilding” and the possibility of mid-year interest rate cuts should lead to an influx of new construction in 2024. [1:23]
  • Tech Trends: Trends using advanced AI machine learning are shaking up the home-buying experience. This publicly traded company (stock name + ticker dropped!) is aiming to transform the way people buy and sell their homes. [6:31]
  • Crypto Corner: BlackRock created a new fund on blockchain technology. It’s spearheading crypto trends that will be the ones to watch this year: tokenization and decentralized finance (DeFi). [10:29]
  • Investing Opportunity: If you want a more guided approach to crypto investing, join my subscribers in Next Wave Crypto Fortunes. And learn more about the crypto tokens that I believe will beat bitcoin’s (BTC) gains after the fourth halving.
  • MI Mailbag: What’s the best way to store your crypto? And what is the “Cold Wallet”? [14:35]

Until next time,

Ian King
Editor, Strategic Fortunes

Diversification vs. “Diworsification”: How Many Stocks Is Too Many?

“I own 300 stocks…”

That’s what a gentleman tells me as we share a bottle of scotch at the Total Wealth Symposium (our annual in-person event for our readers) this past February.

“300?” I say, after nearly spitting my drink out.

“Yes, 300.”

“I’m a little over that,” another person pipes up.

Not trying to sound insulting, I ask, “Do you think that’s too many?”

“Yes. But, I hear about this company and I invest a little. Then I hear about another company and put a little cash in it too. Then another…”

“And I just can’t sell some of these losers. I keep hoping they come back.”

I liked both of these men, but owning 300 stocks? My mind went to what the world’s greatest investors would think. And (don’t shoot the messenger), they would say it’s “insane.”

If that sounds harsh, don’t get mad at me.

Get mad at two of the greatest investors ever: Warren Buffett and the late Charlie Munger.

Warren Buffett stated: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

He continued: “Very few people have gotten rich on their seventh best idea. But a lot of people have gotten rich with their best idea. So I would say for anyone working with normal capital who really knows the businesses they have gone into, six is plenty.”

Munger added: “People think that if they have a hundred stocks they’re investing more professionally than they are if they have four or five stocks. I regard that as insanity.”

So, yes, insane.

These two iconic investors live out this thesis. 65% of their Berkshire Hathaway stock portfolio is in just three stocks:

  • Apple: $180 billion (48% of assets).
  • Bank of America: $34 billion (9% of assets).
  • American Express: $27 billion (7% of assets).

The concentrated portfolio is one reason experts state that Berkshire Hathaway has doubled the annualized return of the stock market over the last six decades.

Another investment legend, Peter Lynch, said owning too many stocks is “Diworsification” in his book, One Up on Wall Street.

That’s ironic, as Lynch himself was a serial stock acquirer who often held more than 1,000 stocks in his fund!

But, with that said, surely four or six investments is too concentrated. After all, I am not as smart as Buffett or Munger, and … even Berkshire Hathaway does hold 36 other stocks.

Yet, we can all assume that 300 stocks, or 1,000, is too many.

But what is the right amount?

10?

25?

50?

The Magic Number…

We all know that owning multiple stocks cuts down on risk.

If you buy just one stock, you’re risking 100% of your portfolio. Even many “safe” stocks are subject to big, sudden drops.

Own two stocks, and you still have 50% portfolio risk in each position.

By the time you get to a portfolio of 10 stocks, things look better. One investment could get completely wiped out, but you might still see your overall portfolio surge ahead.

But take a look at the chart below…

It’s based on data from Burton Malkiel’s classic book, A Random Walk Down Wall Street.

It shows how adding stocks to a portfolio reduces the risk.

However, by the time a portfolio has 20 or so holdings, the incremental reductions in risk are very small.

That’s because when you own a portfolio of 25 equally weighted positions, one position represents just 4% of your portfolio.

If one position doubles, your portfolio goes up just 4%.

If it crashes, it goes down just 4%.

So, diversification works, at least in moderation.

Once you get past 20 to 30 positions, you’re essentially owning the market. After all, the widely followed Dow Jones Industrial Average is a 30-stock portfolio.

So, that magic number is about 25 to 30.

A Diversification Lesson I Learned from Charles Mizrahi

Look, I confess…

Throughout my career, I’ve been the insane idiot who “diworsified” way too many times.

A few years ago, I was talking to Charles Mizrahi about this very topic: How many stocks are too many?

This is the exercise he did with me…

Imagine for a moment that the stock market was the 500 companies in your local town.

If you invest in all 500 of them, you might do well. That is if your town is growing and the overall economy is doing well.

But I bet you could identify 5 to 10 companies that stand out and do much, much better.

Surely, one electrician is better than the other five. So, invest in that electrician’s business.

Surely, one retailer is more competent, harder working, and has a bigger vision than the other five retailers. Invest in that retailer’s business.

And surely, one homebuilder has a stronger reputation than the other five, so invest in that person.

You get the idea. After identifying the top 5 to 10 businesses, why invest in the other 490?

This exercise always helped me put things in perspective.

Charles talked about this a bit more in his interview with Mike Huckabee.

Charles Mizrahi and Mike Huckabee Miracle on Main St.

As You De-Diworsify, Don’t “Pull the Flowers”

Chances are, your portfolio has too many stocks in it.

It’s time to sell a few of them.

As you do, be careful not to “water the weeds and pull up the flowers.” (A quote I am stealing from Charles Mizrahi).

In other words, don’t sell your winners and invest more in your losers.

Losers tend to keep losing.

Winners tend to keep winning.

But I get that it can be challenging.

So, I’ll give you the same advice I gave to the two men I met at our Total Wealth Symposium.

Use our free Stock Power Rating tool located on our Money & Markets website.

The rating is simple.

The lower the rating, the weaker the stock is. Sell it.

The higher the rating, the stronger the stock is. Buy it (or add to your position).

Take Tesla, for example: It’s currently rated a 25 Bearish.

Green Zone Power Rating Tesla Bearish 25

It’s time to sell.

There’s no question about it. It’s as simple as that.

Another example is Nvidia: It’s currently rated a 74 Bullish.

It’s time to buy or to add to your existing position.

Green Zone Power Ratings Nvidia Bullish

Go ahead and check out this free stock rating tool here.

Plug in your portfolio’s positions. It will help you decide which stocks to sell and which ones to hold (or add more money to it).

Time to Concentrate on AI?

As you review your portfolio, be sure to look closely at your exposure to companies that are leading the way in artificial intelligence.

McKinsey and Company expect AI to add $22 trillion to our economy … every year … for the next six years.

That is a lot of money.

As shown, Nvidia is a great play for that trend.

But in his recent interview, Charles Mizrahi revealed an even more exciting opportunity in the AI market.

A company that scores an 80 with our Stock Power Rating system (better than Nvidia!), and you can invest as little as $5.

If you are going to buy one stock, this is that one stock.

Get all the details here, or watch the video below.

Charles Mizrahi AI Oppenheimer

Aaron James

CEO, Banyan Hill, Money & Markets

Diversification vs. “Diworsification”: How Many Stocks Is Too Many?

“I own 300 stocks…”

That’s what a gentleman tells me as we share a bottle of scotch at the Total Wealth Symposium (our annual in-person event for our readers) this past February.

“300?” I say, after nearly spitting my drink out.

“Yes, 300.”

“I’m a little over that,” another person pipes up.

Not trying to sound insulting, I ask, “Do you think that’s too many?”

“Yes. But, I hear about this company and I invest a little. Then I hear about another company and put a little cash in it too. Then another…”

“And I just can’t sell some of these losers. I keep hoping they come back.”

I liked both of these men, but owning 300 stocks? My mind went to what the world’s greatest investors would think. And (don’t shoot the messenger), they would say it’s “insane.”

If that sounds harsh, don’t get mad at me.

Get mad at two of the greatest investors ever: Warren Buffett and the late Charlie Munger.

Warren Buffett stated: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

He continued: “Very few people have gotten rich on their seventh best idea. But a lot of people have gotten rich with their best idea. So I would say for anyone working with normal capital who really knows the businesses they have gone into, six is plenty.”

Munger added: “People think that if they have a hundred stocks they’re investing more professionally than they are if they have four or five stocks. I regard that as insanity.”

So, yes, insane.

These two iconic investors live out this thesis. 65% of their Berkshire Hathaway stock portfolio is in just three stocks:

  • Apple: $180 billion (48% of assets).
  • Bank of America: $34 billion (9% of assets).
  • American Express: $27 billion (7% of assets).

The concentrated portfolio is one reason experts state that Berkshire Hathaway has doubled the annualized return of the stock market over the last six decades.

Another investment legend, Peter Lynch, said owning too many stocks is “Diworsification” in his book, One Up on Wall Street.

That’s ironic, as Lynch himself was a serial stock acquirer who often held more than 1,000 stocks in his fund!

But, with that said, surely four or six investments is too concentrated. After all, I am not as smart as Buffett or Munger, and … even Berkshire Hathaway does hold 36 other stocks.

Yet, we can all assume that 300 stocks, or 1,000, is too many.

But what is the right amount?

10?

25?

50?

The Magic Number…

We all know that owning multiple stocks cuts down on risk.

If you buy just one stock, you’re risking 100% of your portfolio. Even many “safe” stocks are subject to big, sudden drops.

Own two stocks, and you still have 50% portfolio risk in each position.

By the time you get to a portfolio of 10 stocks, things look better. One investment could get completely wiped out, but you might still see your overall portfolio surge ahead.

But take a look at the chart below…

It’s based on data from Burton Malkiel’s classic book, A Random Walk Down Wall Street.

It shows how adding stocks to a portfolio reduces the risk.

However, by the time a portfolio has 20 or so holdings, the incremental reductions in risk are very small.

That’s because when you own a portfolio of 25 equally weighted positions, one position represents just 4% of your portfolio.

If one position doubles, your portfolio goes up just 4%.

If it crashes, it goes down just 4%.

So, diversification works, at least in moderation.

Once you get past 20 to 30 positions, you’re essentially owning the market. After all, the widely followed Dow Jones Industrial Average is a 30-stock portfolio.

So, that magic number is about 25 to 30.

A Diversification Lesson I Learned from Charles Mizrahi

Look, I confess…

Throughout my career, I’ve been the insane idiot who “diworsified” way too many times.

A few years ago, I was talking to Charles Mizrahi about this very topic: How many stocks are too many?

This is the exercise he did with me…

Imagine for a moment that the stock market was the 500 companies in your local town.

If you invest in all 500 of them, you might do well. That is if your town is growing and the overall economy is doing well.

But I bet you could identify 5 to 10 companies that stand out and do much, much better.

Surely, one electrician is better than the other five. So, invest in that electrician’s business.

Surely, one retailer is more competent, harder working, and has a bigger vision than the other five retailers. Invest in that retailer’s business.

And surely, one homebuilder has a stronger reputation than the other five, so invest in that person.

You get the idea. After identifying the top 5 to 10 businesses, why invest in the other 490?

This exercise always helped me put things in perspective.

Charles talked about this a bit more in his interview with Mike Huckabee.

Charles Mizrahi and Mike Huckabee Miracle on Main St.

As You De-Diworsify, Don’t “Pull the Flowers”

Chances are, your portfolio has too many stocks in it.

It’s time to sell a few of them.

As you do, be careful not to “water the weeds and pull up the flowers.” (A quote I am stealing from Charles Mizrahi).

In other words, don’t sell your winners and invest more in your losers.

Losers tend to keep losing.

Winners tend to keep winning.

But I get that it can be challenging.

So, I’ll give you the same advice I gave to the two men I met at our Total Wealth Symposium.

Use our free Stock Power Rating tool located on our Money & Markets website.

The rating is simple.

The lower the rating, the weaker the stock is. Sell it.

The higher the rating, the stronger the stock is. Buy it (or add to your position).

Take Tesla, for example: It’s currently rated a 25 Bearish.

Green Zone Power Rating Tesla Bearish 25

It’s time to sell.

There’s no question about it. It’s as simple as that.

Another example is Nvidia: It’s currently rated a 74 Bullish.

It’s time to buy or to add to your existing position.

Green Zone Power Ratings Nvidia Bullish

Go ahead and check out this free stock rating tool here.

Plug in your portfolio’s positions. It will help you decide which stocks to sell and which ones to hold (or add more money to it).

Time to Concentrate on AI?

As you review your portfolio, be sure to look closely at your exposure to companies that are leading the way in artificial intelligence.

McKinsey and Company expect AI to add $22 trillion to our economy … every year … for the next six years.

That is a lot of money.

As shown, Nvidia is a great play for that trend.

But in his recent interview, Charles Mizrahi revealed an even more exciting opportunity in the AI market.

A company that scores an 80 with our Stock Power Rating system (better than Nvidia!), and you can invest as little as $5.

If you are going to buy one stock, this is that one stock.

Get all the details here, or watch the video below.

Charles Mizrahi AI Oppenheimer

Aaron James

CEO, Banyan Hill, Money & Markets