The market is setting new records almost daily…
The S&P 500 hit its 46th all-time high of the year on August 11. In trading days, that’s a new high almost every third day.
And with close to five months to go in 2021, the S&P 500 has already logged more highs than five of the last six calendar years.
Through August 11… The S&P 500 is up 18.4%. But it’s more than just this well-known index’s large-cap stocks. The Nasdaq Composite Index is up 14.6%, and the Russell 2000 Index is up 14.1%.
You’d think it wouldn’t be hard to make money in 2021…
But history says the average investor is barely making anything in this big year for the markets.
As you can see below, the average investor has underperformed nearly every asset class over the last two decades…
And if you add in inflation, the average investor has made less than 1% per year over the last 20 years.
But as our paid-up subscribers know, you can prove history wrong and outperform the average investor…
Our Subscribers Are Winning Big
So far this year, our flagship Palm Beach Letter portfolio is up 52%, more than doubling the return of the booming S&P 500.
Since Daily editor Teeka Tiwari took it over in 2016 to our recent performance audit in mid-April 2021, that model portfolio has posted an average annual return of 343.3%…
Over the same span, the S&P 500’s average annual return is just 19.9%. Long-standing PBL subscribers have had the ability to beat the S&P 500 by more than 17x.
Meanwhile, subscribers over at our crypto-focused Palm Beach Confidential service have open winners as high as 344%… 580%… and 836%… all in the last 12 months…
Our Palm Beach Venture subscribers have an open 441% win in less than three months…
And some of our long-term investments across those portfolios have open gains as high 12,233% in bitcoin… 35,013% in Ethereum… and 36,929% in a crypto called NEO.
These gains make the S&P 500’s 7.5% average return from 2001–2020 look like pocket change… and they flat-out obliterate the average investor’s measly 2.9% average return.
Again, these are all open positions… many of which were held through some brutal market pullbacks like COVID volatility and plunges in crypto prices.
Now, some of you might be saying, “Sure, those are big wins… but you have access to some of the best analysts, research, data, etc…”
You’re not wrong… we do.
Fortunately for you, we’ve created a blueprint you can use right now to beat the market…
And it doesn’t require anything more than a plan (more on that below), a brokerage account, and some money you can comfortably invest without putting your current lifestyle at risk.
Your First Steps Toward Beating the Market
Before you can throw your money into higher-risk investments like crypto, or speculate on potential triple-digit plays in small-cap or micro-cap stocks, you need a solid foundation…
First, keep the core of your portfolio in more traditional assets like stocks, index funds, fixed income, and real estate… hold for the long term… and have an exit strategy for some of your holdings just in case.
A diversified asset allocation plan will protect you when one corner of the market takes a dive… a long-term outlook will carry you through dips and pullbacks… and an exit strategy like a stop loss will limit your downside.
Also be sure to take advantage of any dividend reinvestment plan (DRIP) your online brokerage account may offer.
DRIPs allow you to take dividend or yield income you earn and reinvest it back into the underlying asset. It’s often as easy as checking a box in your brokerage account.
Not every asset that earns a yield or dividend has a DRIP, but it’s a good tool to utilize when you can… especially when you’re not relying on that income for daily expenses.
Once you have a solid foundation of safe, core investments in place, you can then focus on ideas with life-changing potential… what we call asymmetric risk investing.
With asymmetric risk investing, you take small amounts of money and supercharge your return potential.
For instance, you’re putting up $100 for a chance to make $1,000, $10,000, or even $100,000.
Using positive asymmetric risk is how you turn $1,000 into $151,550 on bitcoin or $1,000 into $1.5 million on NEO – without putting your current lifestyle at risk.
And if you use uniform position sizes, you can put $500–1,000 across a handful of ideas.
So even if you lose $1,000, it won’t be the end of the world… And that small loss will be refreshed by the income from your portfolio of core, long-term investments.
Level Up Your Portfolio
For many investors, one of the first and biggest hurdles to beating the market is asset allocation…
The classic formula is the “60/40” portfolio – a mix between 60% stocks and 40% bonds.
But here’s the thing: Stocks and bonds are not the only assets out there. They’re just the ones that Wall Street people focus on… And the ones they get paid to promote.
Meanwhile, there’s a world of investment options for people to consider…
Should they follow the 60% stocks, 40% fixed income model? Should they add crypto… and if so, how much? And what about assets like gold or real estate?
With the number of investment options today, even just getting started can be daunting… but that’s where we come in.
Every January in our Palm Beach Letter service, Teeka and his team provide an updated asset allocation model.
It contains everything from bitcoin to stocks to real estate, and other alternative assets… and it’s allocated with an eye on limiting risk and beating the market.
And when you combine that next-level allocation with the expert research of Teeka and the PBL team, then it’s no wonder that their model portfolio consistently beats the market… year after year.
If you’d like to learn more about Teeka’s Palm Beach Letter service, Teeka recently sat down for an interview about his “No. 1 Investment of the Decade”… and how it could be as rewarding for his subscribers as buying Amazon in the ‘90s, or bitcoin in 2010.
You can watch it right here.
Regards,
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Grant Wasylik
Analyst, Palm Beach Daily