Of course not: you need good strategy and a good team.
Wow! The market is doing fantastic! It will probably continue to do so for some time to come. But, so are the bond, and commodity markets... I think someone forgot about reverse correlation somewhere. Congratulations! How do we keep those gains in your pocket?
Mama Bear
When does Mama Bear come and take away? Typically when patterns reach a point where P/E reaches above 20, it can get volatile then bearish. The current S/P 500 is an astronomical 40.47... higher than the chart below. Take a close look.
Source Schiller index: Fin Viz.com
What that means to you as an investor is as this ratio increases, so does your risk.
From a contrarian perspective, risk is good. But Mama bear can take away, so we must hedge against her.
How do you hedge? The obvious is to take profits, another great way is to allocate into another asset over time. This is is known as DCA, or dollar cost averaging. It is simply applying our profits to our basis in a new asset. You do this while simultaneously maintaining your long successful position. Its the best of both worlds.
Dollar Cost averaging
So, if we take a hypothetical 1.0mm portfolio that has a basis of 800k, and it makes sense to take profits but do so tactically with dollar cost averaging, how does it work?
We take 10% per quarter, and put into an asset yielding 21%.
Regardless of performance of the market, our asset provides 21% for that 10%, then we allocate capital appropriately each quarter, thus dollar cost averaging out of risk and into a hedge position. At the same time profiting 42% on that allocation!
Its a winner regardless, it may not be a bit coin stop pop out, but it provides hedge against downside risk of speculation while providing substantial return.
At the Cawthon Organization, through our TCO One REIT, we will assist you in navigating this wild market in the following ways.
Inflation
Stimulus checks are out. People are happy, life is good. Especially if you own a Retail business. The downside for us is the reason why they are happy, inflation. Costs of goods and services will rise above the target 2% Fed level. Most of us progressed very well in this market. As indicated previously, this is no reason to panic. It is a reason to hedge. Keep our profits by dollar cost averaging. Once again our allocation fights the Fed for you.
Hedging:
We recommend utilizing at a minimum 20% of your portfolio into non correlated assets. A very good way to do this is through our Dollar Cost Average Program. Call us for more details.
Consider us for a portion of your total return strategy.
Our REIT, The Cawthon TCO One REIT, delivers the following to all investors:
A principal focus on capital preservation, we cannot make money on capital lost.
Our yield is consistent, and conservative, there is simply no way in this market to achieve this level of yield and diversification outside of real estate, we provide both.
Our capital gain thesis is based upon purchasing discounted assets, thus greatly increasing our upside potential, simultaneously reducing downside risk.
Low Correlation to the capital markets Reduction of entire portfolio volatility.
Tax Advantages
Extremely competitive yield and capital gain
1031 Tax Free exchanges
Buy low and sell high through timely, discounted acquisitions
Substantially greater passive income - 21% TCO ONE / 3.5% Public
Our choices for income are very limited in this environment. The Fed will undoubtedly not be raising interest rates anytime soon.
--
James Fournace II
Account Executive for Investment Sales
"Creating Generational Wealth"
Cawthon Organization
225-276-1525
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