What to do now with my stocks? This is a question that is asked of me almost daily. I truly wish I had a way of seeing the best course of action for everyone. If we could see where the market was going, we would all be millionaires. Unfortunately, this is not the case. But I offer you a solid second option. We can do our due diligence and use proper investing techniques to maximize our gains and reduce our risk to an optimal level. If you are wanting to see how to triple your gains with one trade, you will want to read on.
Well if you are reading this paragraph, then you are ready to make some good gains in your portfolio. The one thing I notice about people is that they are complacent in taking care of their money. People will go to college for years or open their own business and work 16 hour days. But at the end of the day, then just put their money in the bank and let it earn a measly return. Or worse yet, they will pay a financial planner to handle their excess income. This is one that really burns me. I once worked for American Express as an financial advisor. Nothing is worse than those management fees that you have to pay when you invest with an advisor. The funds that your money is put into, typically charge 1-2% in management fees every year. This can take a big chunk of change out of your returns over the life of your investments. Some estimates put it in the six digit category. Ouch!!! Fear not though, I have an answer to this question down below.
I am big fan of Warren Buffett and his style of investing. I try to read up all things concerning him and Berkshire Hathaway. One thing that I read recently was that upon his passing away, he has instructed those who will handle his finances to invest his wife’s money into an S&P 500 index fund and a short-term government bond. The exact makeup of the portfolio would be 90% in an S&P 500 index and 10% in a short term government bond. (He recommends Vanguard for the index because of the low cost) Being that he is considered one of the best investors in U.S. history, who am I to argue with that logic. But what if we take his advice and add a bit of spice to it in order to multiply those gains?
So what can we do to try to increase our gains from a straight forward index fund? I have an answer and it is not for the faint of heart. If you are trying to increase your gains while keeping your risk as low as possible, I think I have your answer. Let’s start by agreeing that investing in an S&P 500 index fund will outperform over 80-90% of all professional investment managers over a 10 year period. This is because of the costs associated with using a financial advisor/fund manager. Their costs take away from their gains for you. Based on these findings, it would behoove you to just invest in an index fund and enjoy your 6-8% annual gain on average. But for us who can take a bit of risk and still sleep well at night, this return will not do. Here is what I have been doing with quite a bit of success.
Step 1: Understand that an index fund is your BEST BET at getting the highest return you can get with or without a professional fund manager.
Step 2: Make sure you are investing yourself. Don’t pay someone else to manage your money everyday. It could cost you over $100,000 in fees over the long term.
Step 3: Pick the best index fund that gives you the biggest bang for your buck. Don’t worry, I will show you some of my picks.
Step 4: Leverage, leverage, and leverage a bit more to maximize your returns. (If you want to be more risky with your money that is, if not, then just go with a straightforward index fund)
Step 5: Pay attention to what is happening in the world. There will be opportunities to increase our investing and other times to take some of our gains out of the market. Best thing you can do is to subscribe to this site, so I do all the work for you. 🙂 Sign up over to the bottom right of this page.
Now that we know what to do, it is time to select our stocks. I have a few that I am very happy with. If you are looking to invest in a simple index fund that matches the market exactly, here are a few good ones.
Vanguard’s S&P 500 (VOO) – This has a ridiculously low expense ratio of only .03%. It is why Warren Buffett highly recommends this one. Investing in this one will match you with the returns of the regular S&P 500 on a daily basis.
PDR Dow Jones Industrial Average ETF (DIA) – This is an ETF that matches the DOW. It is one that I personally trade in when I am not leveraging.
The two are all you need if you are looking for a simple and easy what to invest your money over your entire life. Using these, will outperform 80-90% of all professionals. It is the smartest thing you can do with your money. But if you are looking to trying to make above average returns, then here read on.
Now the following stocks are what I am investing in as of the writing of this article. I love triple leverage index funds. They can get you the gains you want and reduce risk by allowing you to still have a diverse portfolio with only one stock. I know that sounded weird, but think about it. You buy UDOW, and put all your funds into that stock. It is a triple leveraged ETF of the Dow. So you have a makeup of 30 different stocks and other financial instruments to get you that leverage. If any one stock goes bad, you still have 29 others to support the fund as a whole. Keep in mind that you will gain or lose 3 times whatever the DOW does day to day. But the beauty of investing in these triple leverage index funds is that if you believe the market is going to head downward over the next few months, like it did because of COVID, then you can invest in SDOW. This index fund is the reverse of UDOW. You are investing in the market to decrease when you buy SDOW. It returns three times the daily loss of the DOW. You can see how investing in just these two leveraged index funds can give you outstanding returns and an easy switch to the other side of the market. (Bull or Bear)
Now that you got the idea of how I invest and what I think is the best way to do it, here are some other stocks that I like to buy throughout a normal year. I personally own TECL, which is a technology ETF that gives you triple leverage in that field. It is the largest gainer for me at this time in my portfolio. It is up almost 100% since I got into in this year. I have my portfolio made up with UDOW and TECL at this moment. I sometimes will move more into the Direxion Daily S&P 500® Bull (SPXL) index fund. This is a triple leveraged S&P 500 index fund. You can also go the opposite and invest in the Bear version of the S&P 500 fund (SPXS). At this moment though, I feel a bit more comfortable with the Dow leverage fund.
I am going to wrap up this article for now. I am in the process of making a Youtube video for this topic. It will be much more in depth. I highly recommend you subscribing to my Youtube channel if you want to get up to date information. I will do all the leg work and you get all the benefits.
James Baxter says
I like to listen to you, as I wish I had some money, (lots of it) can I ask you, who you trad with.
Janie Currey says
As a retired widow, have been invested in high yield dividend securities. Am beginning to feel a little uncomfortable with possibilities of where the market may go and need these dividends for support . What are your suggestions for somewhat protected investments with higher dividends?
Ivan Man says
Been watching your YouTube. Majority are US stocks, EV stocks and recent one gold stock. Would you have any CA stock recommendation?
JAMES R DOUGLAS says
Thanks Moe for your Youtube videos. On TV I don’t know how to hit the Subscribe button since I have Roku and the remote does not have a button for that. You have made lots of money for me and I watch all your videos. Thanks for all you do. I am addicted to the stock mkt. I have a big spreadsheet to track all my stocks. Keep up the Great Work……..
Mrs. Moe says
Thanks so much, James
Thank you for your youtube videos.
Do you have a video on how to setup that spread sheet that you use in your videos.
Mrs. Moe says
We will have it for sale soon, and it will be given free to Patreon members.
I found out about triple leveraged stocks several years ago, UPRO, TNA, ERX, FAS, SOXL, etc. They go up when the market goes up and then SPXU, TZA, ERY, FAZ, SOXS, etc. They go up when the market goes down.
I have two issues,
One is: your saying to use UDOW (up 367% since after the covid crash of last year). I found UPRO (up 450% since after the covid crash of last year). Why would I use UDOW over UPRO?
Second is: How can I know when to switch from one to the other? UDOW to SDOW or UPRO to SPXU?