10 Ways to Bulletproof Your Portfolio: Part I

Editor's note: Today in Empire Financial Daily, we're continuing our series of insights this week from Alex Green – the chief investment strategist at The Oxford Club... This year's volatile markets are a vivid reminder that we live in an uncertain world... Economies expand and contract. Interest rates rise and fall. Markets gyrate up and […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] Editor's note: Today in Empire Financial Daily, we're continuing our series of insights this week from Alex Green – the chief investment strategist at The Oxford Club... --------------------------------------------------------------- 10 Ways to Bulletproof Your Portfolio: Part I By Alex Green --------------------------------------------------------------- [Prediction X FINALLY Revealed...]( Whitney Tilson has spent most of this year gathering research, traveling the globe, and literally risking his life on two separate occasions. Why? To be able to make the boldest prediction of his entire career. One we're calling Prediction X. [And now, he's finally revealing it to the world. Just click here right now](. --------------------------------------------------------------- This year's volatile markets are a vivid reminder that we live in an uncertain world... Economies expand and contract. Interest rates rise and fall. Markets gyrate up and down. And nobody gives you a warning. It's a bit unsettling, especially when your life savings are on the line. Wouldn't it be great if you could bulletproof your investments so you're prepared for whatever the future holds? In fact, you can. You need only follow my firm The Oxford Club's 10 battle-tested principles that have stood the test of time... - Don't try to forecast the economy The national and global economy today is too big, dynamic, and complex for anyone – from corporate executives to central bank presidents – to accurately predict. So if you're running your portfolio based on someone's guess about how long the economic expansion will last or when the next recession will arrive, you're already off on the wrong foot. Twice a year, the Wall Street Journal polls 55 of the nation's leading economists and asks what lies ahead for the economy, interest rates, inflation, and the dollar. Most are way off. (Their consensus isn't so hot either.) It's gotten to the point where even the Wall Street Journal staff is in on the joke. Reporter Jesse Eisinger writes... Pity the poor Wall Street economist. Big staffs, sophisticated models, reams of historical data, degrees from schools known by merely the name of the biggest benefactor, and still they forecast about as well as groundhogs. Punxsutawney Phil may actually have an edge on most of them. - Don't time the market It seems so easy when you look at a chart of past bull and bear markets. If you'd only gotten in down here and then out somewhere up there and then back in around here. As they say in New York, "Fuhgeddaboudit." To try to switch into the market for the rallies and out for the corrections – or just call the major turns every decade or so – is a waste of time and money. It can't be done. Sure, anyone can make a good call. (And don't think they won't keep reminding you.) But to successfully time the market you have to make at least three: You have to buy at the right time, get out at the right time and then buy back in at the right time. Otherwise, the plane will leave you at the airport... since the long-term direction of the stock market is up. Vanguard founder Jack Bogle calls market timing "the loser's game" and adds, "After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has." --------------------------------------------------------------- Recommended Link: [The Invisible Railroad Could Soon Mint a Brand-New Generation of Millionaires]( The richest people on the planet invested in the first railroads across America. I’m talking about Cornelius Vanderbilt, James Hill, Edward Harriman and George and Jay Gould. Even Warren Buffett and his right-hand man Charlie Munger own the biggest railroad in existence. Together, these two are worth $120 billion. As history prepares to repeat itself, you have a rare opportunity to invest alongside the latest marvel of engineering – the world’s first invisible railroad – which is set to produce a massive 1,467% gain for early stakeholders. [Go here before December 31](. --------------------------------------------------------------- - Save more The 2023 Retirement Confidence Survey revealed that millions of Americans are woefully unprepared for retirement. The single biggest reason is they haven't saved enough. Among those who don't feel confident in their ability to live comfortably in retirement, four in 10 workers and a quarter of retirees state it's because they have little or no savings. Millions of Americans today believe the government will deliver the material happiness they deserve, sparing them the trouble and discomfort of striving. Unfortunately, the average retired worker receives just $1,837 a month from Social Security. To ensure a comfortable retirement, you need to save as much as you can, for as long as you can, starting as soon as you can. - Asset allocate your portfolio Asset allocation is the process of finding the optimal mix of investments for your portfolio. I'm not talking about which securities you buy. Asset allocation refers to how you divide your assets among stocks, bonds and other noncorrelated assets to give yourself the best chance of reaching your financial goals while taking as little risk as possible. Asset allocation is your single biggest investment decision, responsible for approximately 90% of your portfolio's long-term returns. What is the best asset allocation? Opinions vary. But The Oxford Club's recommended asset allocation is 30% U.S. equities (divided evenly among large-cap and small-cap stocks)... 30% international equities (divided in thirds between Europe, Asia, and emerging markets)... 10% each in high-grade bonds, high-yield bonds, and Treasury Inflation-Protected Securities ("TIPS")... and 5% each in real estate investment trusts and shares of gold mining companies. - Rebalance your portfolio Each of these asset classes should generate returns that exceed inflation over the long haul. However, they won't move in lockstep. And that's a good thing. Once a year – the date is not important – you need to rebalance your portfolio. That means returning the portfolio to its original percentages by selling back the asset classes that have appreciated the most and putting the proceeds to work in the assets that have lagged the most. Doing this forces you to sell high and buy low. It adds about a point a year to your total return while also reducing your risk, since you are paring back on the assets that are most extended. It may feel wrong to liquidate a portion of asset classes that have done well. (After all, with individual securities the goal is to let your profits run.) But asset classes move in unpredictable up and down cycles. Rebalancing allows you to take advantage of that. In short, investors should ignore the siren call of market timers and economic forecasters, save more, asset allocate properly, and rebalance annually... Covering these bases will keep you on track to reach your most important financial goals. But if you really want to bulletproof your portfolio, these are just the first five steps. I'll cover the other five in my next essay... Stay tuned. Regards, Alex Green Editor's note: When it comes to preparing for the future, make sure to check out the brand-new presentation from Alex and Empire Financial Research founder Whitney Tilson... In short, they believe a rare convergence could set in motion the biggest investment opportunity in over a decade. Years from now, they predict you'll look back and remember exactly which side of this opportunity you ended up on – the winning side... or the losing side. [Get the details here](. --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2023 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 1125 N. 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