The "Quarter Million Dollar" model portfolio is designed for those within 10 to 15 years of retirement who know they will need more to retire on.
To use this portfolio, you do not need a quarter million dollars to get started, but should be starting with some six or seven figure amount. If you are within 15 years of retirement and don't have six figures saved, once you have subscribed, contact me to schedule a personal consultation and we will talk about which approaches within Fundamental Trends make the most sense for you. If you are more than 15 years from retirement you should be taking a more aggressive approach.
This portfolio has two simple to state, yet hard to achieve goals:
In the list of updates below, I also include a very scrubbed list of the best no-load mutual funds that can be used to adjust your core asset allocation and within 401(k) plans. The mutual funds I have selected are among the very best and are low cost. There are inherent problems with mutual funds you should be aware of, so please visit my Reports section and read my "Mutual Fund Guide & Fund Favorites."
> OPEN TO THE PUBLIC DUE TO RISING RISKS IN THE MARKETS <
The core positions of the Quarter Million Dollar Portfolio remain the same. It is possible that I add to the gold position if there is a pullback in price due to a strong dollar event. The six core equity holdings are long-term and I would more likely add on a pullback than reduce on a rally, however, if we do see an irrational rally in the S&P 500 to new highs into the 2300-2500 range, I would be a seller unless there is further monetary easing.
This Friday we will see the portfolio protection using the iShares Russell 2000 ETF (IWM) puts for May expire. That will represent a 1% cost to the accont as we paid for insurance. There is a second iShares Russell 2000 ETF put for August still in the account. I expect that there will be a at least a few big up days after the options expiration, however, I do expect the general direction of the market to be choppy to down over the summer as all of the headwinds I've been writing about come into play.
AbbVie (ABBV) is up about 5% since acquisition. That is a long-term holding that I believe is also likely to be acquired. I anticipate no changes to that position unless there is a significant rally or decline. Upon a major rally I would trim back the holding, upon a major decline I would add to the position.
Chesapeake Energy (CHK) as I discussed in the forum has core assets worth about $20 billion. I will eventually publish that on Seeking Alpha. The simply truth with many stocks is that the shorts are in control because the Boomer demand for stocks is very low at this point and unlikely to return. Only a very clear change in the narrative will drive certain stocks higher. That narrative will change with Chespeake as the successfully sell for good prices a few more assets and oil prices rise dramatically once Saudi Arabia is ready for oil prices to rise dramatically, I believe summer 2017 just prior to taking Saudi Aramco public.
Exact (EXAS) is a long-term story that is chopping along in implementation frustration period. This is not unusual for tech and biotech companies. Investors get impatient and sell. Such is life. It's a great time to add to the position for new investors.
Micron (MU) is in the trough of its cycle and has new technology that appears to be cutting edge hitting the market over the next 18 months. It's also a clear takeover target.
Potash (POT) will eventually benefit from a massive climate change induced increase in demand. It'll happen when it happens. In the meantime, the dividend is now secure.
Here is the very simple investment plan for the next few months:
I will update the chart upon the next transactions.
Introducing the "Quarter Million Dollar" portfolio. This portfolio is designed for those within 10 to 15 years of retirement who know they will need more to retire on. To use this portfolio, you do not need a quarter million dollars to get started, but should be starting with some six figure amount. If you are within 15 years of retirement and don't have six figures saved, once you have subscribed, contact me to schedule a personal consultation and we will talk about which approaches within Fundamental Trends make the most sense for you. If you are more than 15 years from retirement, this is an excellent strategy if you are starting with a rollover from a 401k to an IRA of five figures.
This portfolio has two simple to state, yet hard to achieve goals, for the next decade:
In order to quadruple your money in a decade - double it and then double it again - we will need to average a return of 14.4% per year net of expenses. In a slow growing economy and with markets expected to be volatile, that is a tall order. For most people paying fees to financial advisers and for fund management, it is a virtually impossible goal. Those who choose to manage their own money the way I will show you, will get a huge advantage by cutting expenses well over 1% per year on average versus high priced financial advisers who often use a portfolio full of additional outside management fees.
I largely shared stock picking during the first year of the letter and the methods did not mesh well. As a result I - Kirk Spano - have taken over the reigns completely going forward. I erred in trying to change what had been a very successful strategy for years and years. That is my fault. Anything that happens going forward is also my fault or to my credit.
The following are each of the opening portfolios for 2016. Going forward we will add more reports to include transaction history. None of the portfolios are fully invested right now. Subscribers may use all or some of these models in building their own portfolio.
Our stock and ETF portfolios can be used with options. Investors uncomfortable with options can simply buy more stock/ETFs or hold more cash. Visit the CBOE Learning Center for information on option strategies before attempting an option trade. I suggest paper trading options extensively before using real money to make options trades. Investors can skip the option trading and simply use the stocks and ETFs.
Punch Card Stocks: This is a 20-30 stock growth portfolio which utilizes options. This is a position trading portfolio, that is, we expect to hold all positions at least a year. As such, it is generally good for non-qualified accounts due to relatively strong tax-efficiency. We will buy LEAPs which are long-term call options under certain opportunistic situations, such as after a price crash in anticipation of a price recovery. Generally, 75% or more of the portfolio is stock holdings. Beginning balance $100,000.
Retirement Income Options: This is a 20-30 stock equity income portfolio which utilizes options. This is a position trading portfolio, that is, we expect to hold stocks at least a year. Option trades are generally one to three months in duration. Because we sell options, sometimes we are obligated to buy a stock that we like at a lower price than the day we made the option trade. We are happy to own stocks on our list of companies as that means we generally bought at a low long-term price. Beginning balance $100,000.
Global Trends ETF: This is a 3 to 8 ETF portfolio. About 50% to 85% of holdings will be position trades lasting a year or longer based upon value criteria and no longer being subject to significant downward momentum. Up to 50% of positions will be swing trades, often using leveraged or inverse ETFs. Those not comfortable with such trades should just skip those. Beginning balance $25,000.
I will include a list of top performing, well constructed, low expense mutual funds that have charters which do not hold back good management. There will not be many funds, as most mutual funds constrain their managers by charter, which in my opinion is one of the worst factors that hold an otherwise good idea back.
Fundamental Trends Investment Letter is NOT a Registered Investment Advisor and does NOT provide personalized advice.
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Investors must make their own financial planning and investment decisions based upon your own individual circumstances, goals and risk tolerance.
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