Mike’s note: Our goal in the Market Minute is to bring you profitable trading ideas that can help grow your wealth… without putting it at risk.
That’s why, today, we’re sharing an essay from our colleague E.B. Tucker, who’s managed to protect and grow his fortune over the years by following something he calls the “barbell strategy.”
E.B. swears by this strategy, as it helps balance a portfolio between safe, sleep-well-at-night stocks and speculations.
And one of those speculations – featured last night at his Explosive Profits Summit – is a unique type of stock that can provide fast, triple-digit returns for investors who get in at the right time.
In the meantime, read on to learn how this “barbell strategy” can work for your investing plan…
I spend 0% of my time worrying about – or preparing for – a crash. Here’s why.
I run a “barbell strategy” with my personal assets.
Picture a metal bar with weights on it.
On one side of the barbell, I have real assets: physical gold, unleveraged property (if you owe on it, you don’t own it), and cash value on whole life insurance.
These assets are incredibly boring, but they represent real wealth.
I also include some stalwart stocks on this end of the barbell, as well as world-class, dividend-paying stocks. These blue-chip stocks are so boring, I don’t even look up the quotes – they’re not about making huge gains… they’re just equity in big, stable firms.
But the other side of the barbell is much more exciting and carries more risk.
I have a massive position in a gold royalty firm that just listed on the New York Stock Exchange, where I’m on the board and chair of the executive committee. And I have several other exciting speculative positions.
The takeaway here is I have a lot of very high-risk investments that are paying big for me right now.
But these two ends of the barbell must be balanced to avoid catastrophe.
A Balanced Barbell Will Help You Rest Easy
As an example, say on the high-risk end of the barbell I have ABC Mining Stock. After I do a placement, it shoots up 300%.
At that point, I sell half of it – or more. I take that money and split it between the ends of the barbell. I want to keep the “boring,” real asset side balanced, so I can keep taking risk with the other side.
Real assets, while not very exciting, are real wealth.
There are always speculations out there – real assets are much harder to get control of.
Over time, you’d be surprised how good this strategy feels. If the stock market takes a 20% dive overnight, I don’t care.
Because I have my real assets to keep me balanced.
I sit back and see what happens in the ensuing weeks, then make a buying decision when everyone is panicking and pulling out of the markets.
Know When to Put New Weight on Your Bar
Another example is what I did during the 2009 housing crisis…
People were panicking and nobody was buying. That’s a market bottom – and an opportunity, when you have a balanced barbell.
If I didn’t have some cash then, I would have just been a guy who watched real estate rot until someone started buying it a year or two later.
But I had cash. I liquidated my retirement accounts and bought single-family rental homes in Ybor City, a neighborhood in Tampa, Florida. I paid $10,000 for one home that had a mortgage on it for $165,000 the year prior.
I paid $25,000 for a seven-bedroom home that had a $250,000 mortgage default judgment on it.
The market recovered… and those rental homes are still paying me a hefty stream of income on my real wealth side.
This allowed me to weight my more speculative positions when the real wealth side got heavier.
The Last Piece of the Strategy
This all comes down to the final piece of my barbell strategy.
The bar.
That’s me… My job is to determine what will generate new capital. I have to decide where to put new weight on the bar. I have to remain disciplined and reweight my barbell as
necessary.
So, I’d encourage you to consider my barbell management strategy.
Knowing you’ll still be wealthy no matter what the market does will help you sleep soundly in 2020.
E.B. Tucker,
Editor, Strategic Trader
P.S. Remember, my real wealth side is just a piece of my barbell strategy… the other portion is exciting speculations.
But speculations don’t have to be risky. You don’t have to risk a lot to make huge gains.
My beat is low-risk, high reward. And I’ve spent a year developing a strategy to do that consistently, using what I call “Omega Shares.”
For example, my subscribers are sitting on a 916% gain so far… and they only risked pennies on the dollar.
You can use my strategy to keep your wealth secure… and also make huge gains… if you join me here, where I reveal everything you need to know.
Now, this won’t be up forever. Click right here to watch now, for free.