{"id":1134751,"date":"2019-08-26T14:52:01","date_gmt":"2019-08-26T19:52:01","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=107880"},"modified":"2019-08-26T14:52:01","modified_gmt":"2019-08-26T19:52:01","slug":"the-one-strategy-that-beats-wall-street","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1134751","title":{"rendered":"The One Strategy That Beats Wall Street"},"content":{"rendered":"

This post The One Strategy That Beats Wall Street<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Dear Reader,<\/p>\n

Wall Street is a scam.<\/p>\n

I\u2019ve said it probably a thousand times. It\u2019s something I know from experience. Over the past 15-plus years, I\u2019ve tried just about every investing strategy in existence.<\/p>\n

I\u2019ve run a hedge fund that was successful. I ran a fund of hedge funds, which means I\u2019ve probably analyzed the track records and strategies of about 1,000 different hedge funds.<\/p>\n

I\u2019ve written several books about my experiences, but I can summarize everything I\u2019ve learned in just one basic idea. The best way to make money in stocks is to hold forever.<\/p>\n

I know what you\u2019re probably thinking: You\u2019ve heard stories about big-shot traders that rake in millions. My colleague Tim Sykes, for example, has certainly struck it rich jumping in and out of stocks.<\/p>\n

But let\u2019s face it, success stories like Tim\u2019s are rare. And there will always be a few people who get lucky. That\u2019s how luck works.<\/p>\n

But all my years of experience have led me to strategies that generate consistent, market-beating returns. Having an arsenal of diverse strategies is the key to unlocking enormous wealth (go here<\/strong><\/a> to learn about one of the best).<\/p>\n

I get emails every day from people who say they have a system that beats the market. They\u2019re usually really nice people. I\u2019m sure they\u2019re talented and hardworking. And their ideas are usually terrible.<\/p>\n

Here\u2019s the problem\u2026<\/p>\n

There are millions<\/em> of talented people trying to beat the market. They\u2019re smart. They\u2019re hungry. And they spend their time finding every advantage possible \u2014 the fastest computers, the best data and the most valuable inside information.<\/p>\n

I\u2019m telling you what I know from experience.<\/p>\n

The only folks that make millions without<\/em> these advantages are the ones like Warren Buffett and Bill Gates. They\u2019re committed to owning a stock for a long time.<\/p>\n

Warren Buffett has never sold a share of Berkshire Hathaway since 1967. Bill Gates sells a little nowadays, but basically held his Microsoft stock for decades.<\/p>\n

Every great investor will tell you the same thing. They\u2019ve all used \u201ccompounding\u201d to make a significant portion of their wealth.<\/p>\n

In short, compounding involves reinvesting the money you make from an initial investment in order to make even more money. As you keep reinvesting the money, the effect multiplies. Over a long period, you can earn staggering profits on your original investment.<\/p>\n

So what kind of stocks should make sense for this strategy?<\/p>\n

\u201cA company is only worth the money you get back from it.\u201d<\/p>\n

That quote is from Mark Cuban. Mark is tremendously successful. He made his first billion by selling his company, Broadcast.com, to Yahoo back in 1999. Most people call him lucky for selling at the top.<\/p>\n

I don\u2019t think he was lucky. I think he\u2019s one of the smartest people I\u2019ve met. If he didn\u2019t make a fortune on Broadcast.com, he would\u2019ve made a pile of money on something else. That\u2019s what the smartest investors do. The quote above is something he said to me a few years ago. It stuck with me because it\u2019s so simple.<\/p>\n

When I first met him in the \u201990s, I would never have imagined him being a dividend lover.<\/p>\n

Nevertheless, a few years back Mark dropped this line \u2014 \u201cI believe non-dividend stocks aren\u2019t much more than baseball cards. They are worth what you can convince someone to pay for them.\u201d<\/p>\n

Again, he makes a great point.<\/p>\n

Dividends are the simplest way to collect a piece of a company\u2019s cash flow. When a company pays a dividend, it shows they\u2019re serious about sharing profits with investors. Every other smart investor I\u2019ve met says the same thing.<\/p>\n

Warren Buffett is still the best-known dividend aficionado. Each of his top 10 stock holdings pays at least <\/em>a 1% dividend yield (as of his latest reported holdings). His amazing track record is a testament to the power of compounding.<\/p>\n

As I mentioned earlier, Buffett believes in holding stocks for decades, if possible. He has a unique way of looking for companies to invest in\u2026<\/p>\n

You see, he doesn\u2019t look at P\/E ratios. He\u2019s not a value investor in the classic sense. He bets on demographic trends. The most important investing quote he\u2019s ever said is, \u201cIf a company will be here in 20 years, then it is probably a good investment now.\u201d This is not always true. He said, \u201cprobably.\u201d<\/p>\n

So what companies will probably be here in 20 years? I have no clue. Nor does he. But I will bet on the companies that are returning cash to shareholders. They\u2019re called Dividend Aristocrats.<\/p>\n

The term \u201cDividend Aristocrats\u201d refers to an exclusive group of companies that have increased their dividends every year for at least 25 consecutive years.<\/p>\n

The list represents the best, most reliable stocks out of the thousands of companies in the stock market. The requirement sounds pretty simple, but it\u2019s an extremely high bar for a company to aim for.<\/p>\n

You see, lots of companies are profitable. Lots of companies use dividends to distribute their profits to their shareholders. And lots of companies have long streaks of paying out dividends.<\/p>\n

But only a few businesses raise their dividend every single year for decades. Keep in mind, companies are constantly dealing with changes. There are a million things that can go wrong, messing up management\u2019s growth plans.<\/p>\n

Over a 25-year stretch, you\u2019re guaranteed to run into recessions, shifts in technology and consumer tastes. Meanwhile, every profitable business faces competition.<\/p>\n

The more profitable you are, the faster your growth, and the more competition there is for every dollar you collect.<\/p>\n

That\u2019s why the Dividend Aristocrat title is such a big deal. It means a company has delivered the kind of stable growth that every smart investor looks for. It means the company has a disciplined approach to deploying capital.<\/p>\n

In short, it means the company is extremely<\/em> well run.<\/p>\n

Not surprisingly, research shows that these companies do better than the rest of the market over long periods.<\/p>\n

According to S&P, the S&P Dividend Aristocrats index returned something like 225% over the past 11 years or so. That\u2019s more than 90% higher<\/em> than the S&P 500 index over the same timeframe.<\/p>\n

That\u2019s why every smart investor should know about dividend-paying stocks. And why, when looking for those stocks, the Dividend Aristocrats list is the best place to start. You can look them up online.<\/p>\n

But if you\u2019re looking for a safe way to supercharge your retirement, go here.<\/strong><\/a><\/p>\n

Regards,<\/p>\n

James Altucher
\nfor The Daily Reckoning<\/em><\/p>\n

The post The One Strategy That Beats Wall Street<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post The One Strategy That Beats Wall Street<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

A simple strategy that lets you boost your portfolio’s payouts almost any-time you want…<\/p>\n

The post The One Strategy That Beats Wall Street<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[366,398,463],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1134751"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/87"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1134751"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1134751\/revisions"}],"predecessor-version":[{"id":1134752,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1134751\/revisions\/1134752"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1134751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1134751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1134751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}