This Is the Holy Grail of Investing

This Is the Holy Grail of Investing

BY KEITH KAPLAN, CEO, TRADESMITH

I love buying stocks. After all of these years, it’s still a rush.

I’m looking to amplify my gains and to build a secure future for me and my family.

And I love every minute of it.

The markets today are frothy, to be sure, but our indicators are still very much bullish.

So I’m staying fully invested, but I’m much more regimented than I’ve ever been when it comes to investing.

I like to say that the difference between success and failure is simply having a plan – and sticking to it.

I used to just buy single stocks (or funds or cryptos) without any process or planning.

Nowadays, I spend less time figuring out what to buy, when to buy, and when to sell, because I use a system. One that is rooted deeply in the VQ we talked about last time.

And I can do it all with one button…

I have referred to the VQ – Volatility Quotient – which measures the inherent movement in a stock, “the single most important number in investing.”

You can use this number to know exactly when to buy, how much to buy, and when to sell any stock, fund, or crypto.

It’s really powerful.

But we built a bigger, better system for figuring out how to deploy money into a basket of stocks, funds, or cryptos. (I’ll just say ‘stocks’ for ease from here on out.)

We call it the Pure Quant Portfolio Builder and it’s the only way I buy stocks now. Don’t let the nerdy name fool you… it’s not as complicated to use as you might think. You literally just tell it a source of stocks, a dollar amount, and how many stocks you want to buy.

It gives you a portfolio of healthy stocks that is diversified, risk-adjusted, and reads like a recipe for investing that you can execute in your own brokerage account.

And frankly, this tool is like the holy grail of investing.

When I say diversified, I’m talking about performance. We want to build a basket/portfolio of stocks that can weather storms and grow over time while minimizing risk/loss.

The diversification algorithm we built takes stocks and puts them together in a way that takes advantage of “uncorrelated” performance. This gets you real diversification to allow some stocks to fall while others gain.

In a real raging bull market, perhaps all the stocks are rising at the same time. In a bear market, a performance level of diversification (versus just being in every sector or asset class) can protect you from loss and generate gains at the same time.

That’s our goal – greater gains with lower risk.

And when I talk about “risk-adjusted” portfolios, that is critical to success.

Here’s a simple example…

Last time I covered the VQ, I talked about Tesla having a VQ around 49%. For comparison’s sake, Johnson & Johnson, on the other hand, has a VQ around 12%. So if I had $10,000 and wanted to invest in Johnson & Johnson and Tesla, I wouldn’t just put $5,000 in each. I’d put about $7,950 into Johnson & Johnson and about $2,050 into Tesla.

The reason is I want to minimize my overall risk on the $10,000 by equalizing the individual risk between the two stocks, giving my portfolio the greatest ability to generate a gain. If I put too much money into Tesla and it sharply fell (remember, its 49% VQ means it’s highly volatile and unpredictable), I could panic and lose a LOT of money.

I’m not saying you should avoid investing in risky stocks; what I’m saying is that you should invest in a risk-adjusted way for better gains.

In our system, we cover almost 30 billionaires, taking their publicly released 13F reports that track all of their trades and loading those trades into our system as well. This includes people like Ray Dalio, Warren Buffett, George Soros, and many more. In total, our system includes about 1,400 unique investment ideas that the world’s greatest investors put to work.

I just ran a quick Pure Quant portfolio taking the 1,400+ investment ideas from the billionaires we track and said I wanted five diversified, risk-adjusted positions spread across $50,000.

Here are the results…

You can use any source of stocks with this tool, including:

• Your favorite newsletters.
• Random stocks you like.
• All of the billionaires we follow.
• Specific sectors.
• Even the whole stock market.

And the Pure Quant Portfolio Builder will do all the hard work for you. It picks the healthiest stocks from those sources, diversifies them, and builds a perfectly risk-adjusted portfolio based on the VQ that you can model in your own portfolio.

Notice I said “picking the healthiest stocks” above? That’s because Pure Quant will, by default, only show you stocks that are in our Green Zone (i.e., healthy and in an uptrend).

Pure Quant is fun and powerful. And works with just one button.

It’s the only way I buy stocks now.

And, to be clear, I do think now is the time to buy stocks – but you want to make sure you’re buying the right ones at the right time.

On February 27 at 8 p.m. ET, I’m going to share the biggest prediction in my company’s 20-year history. One that will likely have you eager to buy stocks as well.

It’s free to attend. All you have to do is register for The Last Meltup right here.

Thank you,

Keith Kaplan

CEO, TradeSmith