Young Research’s Dynamic Maximizers Portfolio®
What does a stock market meltdown look like? Think back. What were you up to at the turn of the century? Feels like a long time ago, doesn’t it? Are you aware that during this period, the speculative NASDAQ (larded with non-dividend payers) endured four annual declines of greater than 20%? And over 30% was knocked off the NASDAQ in three of these “take you out of the game” debacles. Moreover, the horrific 2008 collapse peeled 41% off the NASDAQ.
Remember, when you lose half your money in any period of time, you must double your money just to get back even.
A Brand New Portfolio Concept
I have introduced a new portfolio concept to keep investors safe and dividend-centric during the next stock market collapse. I have tweaked my original work on dividends and interest, along with my long-time interest in gold (I have held my original 1982 China Gold Pandas for decades), to produce what I call the Dynamic Maximizers® portfolio.
What is the Dynamic Maximizers® Portfolio?
The Dynamic Maximizers® portfolio is a fine-tuned derivative of Young Research’s original Maximizers portfolio. On the stock side of the portfolio, I focus on high-barrier-to-entry businesses with lasting competitive advantages as well as firms with long records of paying and increasing dividends. On the bond side, I use a mix of Treasuries and investment-grade bonds whose weights vary depending on the opportunities and risks in the bond market.
The portfolio concept is simple and conservative, but as we all know too well, knowing how is simple, but actually having the discipline, intestinal fortitude, and patience to bring off a Maximizers portfolio compounding strategy is quite another matter.
Who should invest in the Dynamic Maximizers® Portfolio?
The Dynamic Maximizers® portfolio is ideal for retirement investors, IRAs, and education programs, to be used instead of fixed-income portfolios in periods of historically low and manipulated interest rates. Dynamic Maximizers® portfolio investors, should however, recognize going in that long dry spells of underperformance can be expected and are just part of the game with such a conservative approach.
What kind of performance should you expect from the Dynamic Maximizers® Portfolio?
Past performance is no guarantee of future success, but I am proud to say that Young Research’s Dynamic Maximizers® portfolio hasn’t suffered a single down year this century. Compare that, by example, to the NASDAQ Composite.
The display below tracks the performance of Young Research’s Dynamic Maximizers® portfolio versus the NASDAQ from year-end 1999. My conservative Dynamic Maximizers® portfolio strategy beats the reach-for-return crowd by a country mile.
Total Gains This Century
Disclosure: Performance numbers are back tested and do not reflect actual results which may differ significantly from the theoretical returns presented. The Dynamic Maximizers® portfolio was constructed with the benefit of hindsight, including the ability to adjust the method for selecting securities to optimize performance. There is a potential for loss in any investment, including the loss of principal invested. No representation is being made that an investment in the Dynamic Maximizers will or is likely to achieve profit or losses like the theoretical back tested performance numbers shown. The information presented is for informational purposes only and should not be considered investment advice or a recommendation to buy or sell any types of securities. The theoretical performance numbers do not consider investment management fees, trading costs, or other fees or charges and do not reflect the impact of taxes.
Win the War, Not Every Battle
What is most shocking about this long-record of outperformance, is that the NASDAQ actually beat Young Research’s Dynamic Maximizers® portfolio in 11 of the 18 years profiled. A 7-and-11 MLB starting pitcher record would get a player banished to the bullpen. My Dynamic Maximizers® portfolio strategy wins the war by a long shot and it does so with no down year. Furthermore, in 14 of the 18 full years this century, returns for my Dynamic Maximizers® portfolio have fallen within a 3% to 10% range. For the outgunned NASDAQ, the deviation from best to worst year is a breathtaking 91 percentage points. And the bone-chilling NASDAQ record includes five down years, four of which were bruisers. No half-sensible retirement investor is going to sign on for that back-snapping volatility.
Remember my cardinal rule of portfolio crafting: “Always analyze risk before worrying about potential returns.”
Young Research’s Dynamic Maximizers – Shocking to Behold
How does your retirement portfolio look?
- Do you actually have any idea what you are doing? Do you feel like you are over your head and investing with a crap-shoot mentality?
- Are you subsisting on outmoded, far-too-big mutual funds or, worse yet, those ghastly oversized index funds?
- Are you a total neophyte on bond investing and pretty much devoid of understanding the miracle of interest, patience, and compounding?
If your answer is yes to any of these questions, you may require a whole new battle plan to strengthen your investment strategy.
Since 1978 Young Research has developed strategies for conservatives like you.
Warm regards,
Dick