I love buying stocks.
After all of these years, it’s still a rush.
That’s because I’m looking to amplify my gains, and I love every minute of it.
But today, I’m much more regimented than I’ve ever been when it comes to investing.
I used to just buy stocks (or funds or cryptos) without any process or planning.
I’m happy to say that, nowadays, I spend less time figuring out what to buy because I use a system.
One that is rooted deeply in the Volatility Quotient (VQ) I talked about on Monday.
For a refresher, the VQ measures the inherent movement in a stock. I call it “the most important number in investing.”
The VQ tells you exactly when to buy, how much to buy and when to sell any stock, fund or crypto.
It’s really powerful.
But we at TradeSmith 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.”
Don’t let the nerdy name fool you. It’s not as complicated to use as you might think, and it’s the only way I buy stocks now.
You just tell it a source of stocks, a dollar amount and how many stocks you want to buy.
Frankly, I call this tool “the holy grail of investing.”
Lower Risk, Greater Gains
The Pure Quant Portfolio Builder gives you a diversified and risk-adjusted portfolio of healthy stocks. It reads like a recipe for investing that you can execute in your own brokerage account.
When I say “diversified,” I’m actually talking about performance.
We want to build a portfolio that can weather storms and grow over time while minimizing losses.
So, the diversification algorithm we built takes stocks and puts them together in a way that takes advantage of what’s called “uncorrelated performance.”
This gets you real diversification to allow some stocks to fall while others gain.
In a 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 losses and generate gains at the same time.
That’s what we want: lower risk, greater gains.
How to Invest Wisely
A risk-adjusted portfolio is critical to success.
Last time I covered the VQ, I talked about Johnson & Johnson having a VQ around 15%, while Tesla’s was around 50%.
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 actually put about $7,600 into Johnson & Johnson and about $2,400 into Tesla.
The reason is, I want to equalize risk between the two stocks so that I can minimize my risk on the $10,000 and give it the greatest ability to generate a gain.
If I put too much money into Tesla and it sharply fell (50% VQ means it’s highly volatile and unpredictable), I could panic and lose a lot of money.
I’m not saying not to invest in risky stocks. I’m actually saying: Invest wisely in a risk-adjusted way for better gains.
5 Billionaire-Approved Stock Picks
In our system, we cover almost 30 billionaires. We take their publicly released 13F reports, which track all of their trades, and we load those trades into our system.
That’s people such as Ray Dalio, Warren Buffett, George Soros and many more…
We have about 2,000 investment ideas that the world’s greatest investors have put to work loaded into our system.
I ran a quick Pure Quant portfolio in November, taking the 2,000-plus investment ideas from billionaires, and said I wanted five diversified, risk-adjusted positions spread across $50,000.
Here are the results:
You can input any source of stocks:
- Your favorite newsletters.
- Random stocks you like.
- All of the billionaires’ favorite stocks.
- Specific sectors.
- Even the whole stock market.
And the Pure Quant Portfolio Builder will do all of 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 your own portfolio after.
Notice I said “picks the healthiest stocks” above?
It’s because Pure Quant will, by default, just bring back stocks that are in our Green Zone (aka healthy uptrends).
Pure Quant is fun and powerful. It’s the only way I buy stocks now.
Join Us at the 4X Stock Accelerator Summit
I hope you enjoyed these essays I put together for you.
I’ll have a lot more to tell you at The 4X Stock Accelerator Summit with Ian King on February 25.
At this special event, I’ll share the complete details on the strategy you can use to pinpoint exactly how much to invest in a single stock.
And if you sign up now, you’ll get exclusive access to The 4X Stock Accelerator Summit website, where you’ll unlock a series of training videos leading up to the event.
So, what are you waiting for?
If you’re serious about maximizing your gains while minimizing your risks, then reserve your spot today — absolutely free — by clicking here.
Thank You,
Keith Kaplan
CEO, TradeSmith
