Update - September 15, 2020

I’m Fired Up

I read something yesterday that I have to share with you.

It shows exactly why the average investor not only fails to keep up with the market… but flat-out gets stomped on as it goes rushing by.

If that’s how you feel… read on.

The piece that got my ire was an article published by a major investing site by an author with more than 40 years of “experience.” But it could just as easily have been written by a college freshman after her first week of Economics 101.

Or, worse yet, it may have been published by one of those new robowriters – the sneaky algorithms that take the clichés of Wall Street and string them into a piece with plenty of bones… but no meat.

The piece was headlined, “Bank of America Is Ballast in a Balanced Portfolio.”

Here are the lines near the top that made me gag…

Bank of America’s 18-cent dividend rate, even if it seems modest, yields 2.82%. It was a nice ballast to have when Apple (AAPL) fell 12% over 10 days.

It’s like the old investment adage. You don’t diversify your portfolio to make money. You diversify it to keep the money you have.

No… I think the headline has it right.

It’s ballast – the stuff that any sailor knows you ditch when you want to go fast.

Look at the chart and tell me if that 2.82% dividend “was nice.”

Over the past year, shares of Bank of America have dropped 15%… while Apple has soared by more than 100%.

That 3% dividend wasn’t nice. It was a crime.

“Okay, Andy,” the skeptics (and sailing experts) are saying. “But ballast is supposed to keep us steady when things get rough.”

True. When the investing textbooks were written 50 years ago, the idea had a lot of merit.

In a normal market, it still does.

But look around. Interest rates are at zero. The Fed is printing trillions. And stimulus is coming one wave after the next.

For proof that Bank of America isn’t keeping anybody safe from this storm, your honor, we turn to Exhibit 2… a chart from the start of the year through the market’s bottom in March.

If the Bank of America “ballast” was doing its job, it would have helped keep the portfolio, as we mariners might say, on an even keel.

But nope… the bank dropped over 40%. It was more than twice Apple’s fall… and even twice the drop of the market.

So, to the writer of this ballyhooed piece about balancing our portfolios with slow and steady stocks, we offer this piece of advice. Stop writing about what worked 30 years ago and go hang out in the real world.

And to the reader who may have been infected by these ideas… go take a shower.

When you dry off, I’ve got something new for you.

It’s big. It’s controversial. And it will ensure you never weigh down your wealth with unnecessary ballast again.

I’m in the process of wrapping up the next issue of Manward Letter. It will be rushed off to the printer in the next few days.

My team and I are in a hurry to get this one in your hands because it details a smarter, better way to think about how to create a balanced portfolio. It’s so big and so unique, in fact, I just bought a URL that matches the name of this new “modern” theory.

If your portfolio has been dragged down by too much “ballast”… if you’ve wondered how newer assets like cryptocurrency and even options fit into your portfolio… or if you’re simply looking for a smarter way to beat the market, you’ll enjoy this issue.

It’s a big one.

Stay tuned.

I’ll get it in your hands in the next couple of weeks.

Be well,

Andy