One Portfolio, Three Strategies

Not everybody rides a bicycle the same way...

Some may enjoy a leisurely bike ride through the neighborhood, others may weave through traffic to get back and forth to work and there may be those who enjoy the excitement of trail riding and racing. And yet, all three may use the same bicycle to accomplish their task. This is why we offer three different strategies for The Street Smart Investor...

This is a unique approach to portfolio management. A good position is a good position. However, entry and exit points may vary depending on your own goals, temperament and time commitment. Our Three Strategies are:

These terms get tossed around in the financial world and have different meanings for different people, so I think it would be helpful to define these in terms of The Street Smart Investor portfolio.

This strategy has capital preservation as its highest priority. Of course, gains are sought, but avoiding or minimizing losses is the utmost priority. This doesn't necessarily mean you'll make less money in this strategy, but it is likely you'll have less exposure to risk and high volatility. This strategy would likely have fewer trades that the other two strategies. Inverse ETFs are not recommend for this strategy in downswings of the market (being in cash is preferred). People who might find the Conservative Strategy best for them would be those who have a fixed "nest egg" and desire to avoid potential downside. Others who could benefit from this strategy are those who have limited time to invest in their portfolio management.

The goal of this strategy is to capture profits on positions at optimum levels (measured moves). By capturing profits, money comes out of the position and is "safe" from loss, while retaining a portion of the position for additional potential gains. This strategy may also use Inverse ETFs in downturns of the market to seek additional profits. The Prudent Strategy, by its nature would require more trades than the previous strategy and therefore more attention. People who would benefit by this strategy are those seeking income from their investments. Also people who have the time to be more actively involved in their investment management might find this suits them well.

Growth by maximizing gains is the objective of this strategy. This requires a greater percentage of money "in" the market at any given time (i.e., not taking profits or having significant cash holdings). This strategy employs "hedging" by using inverse ETFs. With having more "exposure" this strategy comes with more potential volatility. The Aggressive Strategy is for those who are seeking wealth building. These investors may have other sources of income and are also capable of earning back any loss incurred. This is also for those whose temperament has more tolerance for volatility in their portfolio. All Strategies employ rigorous risk management with the use of Stop Losses, Limit Sells and Trailing Stop Losses. These Sell points are determined and set at the time of purchase. This helps to ensure your profit levels are sold and protection against downside risk. This also takes out the emotion of trading which is the enemy of an investor. The only thing worse that hearing someone say, "It'll come back" is, "I'm averaging down" (meaning buying more as the stock declines). This also helps to prevent the greed factor of "Let it ride -- this baby's going to the moon!" Then seeing it quickly reverse and wipe out all your gains. "Let it ride" are the famous last words of those who return from Las Vegas broke on a Greyhound Bus. No Strategies we use allow excessive risk or......