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How to Buy the NEAR-PERFECT Portfolio... With One ClickBy
Tuesday, November 11, 2014
Last month in DailyWealth, I introduced you to the "near-perfect" investing portfolio.
It's a simple strategy... one that has delivered 10%-plus compound annual gains for four decades.
Most impressively, over the past four decades, this strategy had only one losing year... a -0.6% loss in 2008. (Keep in mind the stock market fell by 37% in 2008, and most other investments lost value as well.)
When I introduced this simple strategy to you last month, I didn't show you a simple, one-click way to trade it. That's because it didn't exist.
Today it does. (Sort of.)
This simple strategy was developed by a good friend of mine – Meb Faber. The basic idea of the strategy is that the world is your oyster... You don't want to just own U.S. stocks. You want to add foreign stocks, real estate, commodities, bonds, etc.
The important thing Meb discovered in creating this simple system is that you simply want to own what has been going up in recent months... and you don't want to own what has been going down. The basic idea is "momentum."
Last week, Meb launched a "global momentum" fund to do just this. The symbol is GMOM. Its name is the Cambria Global Momentum Fund.
In Meb's original simple strategy, he had just five asset classes. It worked well, obviously. But you don't want to be limited as an investor... That's like limiting the artist Van Gogh to the primary colors – with -no mixing allowed.
In Meb's new exchange-traded fund, he starts with 50 "colors" – 50 different investment classes, sectors, and countries – and he puts the money to work in the ones with the best momentum. Specifically, he buys the top one-third of them, based on recent performance.
So GMOM is not exactly Meb's original simple strategy. I spoke with Meb about this a couple days ago on the phone and he believes that, in principle, the concept is the same.
Meb's near-perfect investment portfolio was built on being willing to own whatever is going up in the world – stocks, bonds, commodities, or real estate. To Meb, GMOM is a simple and improved evolution of that idea.
Even better for you, you now have a way to buy into this idea, with just one click...
For more on Meb's new fund, visit here.
Good investing,
Steve
Further Reading:
As an investor, Steve says, "you don't need to be right 100% of the time, or even 80% of the time... What you need to do is simple: You need to make your winners bigger than your losers." Learn how this strategy produced 27% annual gains for Steve's readers here.
The path to real wealth through investing is to "hold your nose and buy," Steve writes. "So... what's hated right now? Where might you consider holding your nose and buying?" Find out here.
Market NotesLIKE IT OR NOT, THIS UPTREND IS ALIVE AND WELL Today's chart shows it's still boom times for "offense contractors."
Last June, we noted that the U.S. is involved in so many foreign wars that "defense contractors" should be called "offense contractors." We also noted that many folks were warning against investing in this industry... due to an expected reduction in government spending.
That spending reduction has not arrived. You can see this "non-arrival" by looking at the past two years' price action in the PowerShares Aerospace and Defense Fund (PPA). This investment fund is a "one click" way to own a diversified basket of offense contractors. These companies manufacture tanks, fighter jets, submarines, aircraft carriers, and various other things required to wage modern war.
After trading sideways for most of 2014, PPA shares are up 10% over the past few weeks and just set a new all-time high. The bull market in "offense contractors" is still on.
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