Editor’s Note: Eric Fry here. Tomorrow, Sep. 27 at 8:00 p.m. ET, I’m joining TradeSmith CEO Keith Kaplan for a special event centered around the one topic no one can stop talking about: artificial intelligence.
And I know it may sound shocking considering its atmospheric climb this year, but NVIDIA is NOT the biggest AI story out there…
And neither is Amazon, Apple, Microsoft, or Google. When it comes to AI, most investors are missing a much bigger opportunity… A tiny startup has created a massive gamechanger in the markets – with innovations that are giving a small number of ordinary Americans the chance to make up to 11X MORE on every stock, ETF, or fund they own.
Keith and I will explain it all tomorrow, so make sure you’re there. Click here to save your spot.
Now, without further ado, Keith has joined us for another special guest column all about this amazing new development…
Keith Kaplan here, CEO of TradeSmith.
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 love every minute of it.
The markets today are frothy, to be sure, but as I told you a few days ago, our indicators are still very much bullish. So while I’m not moving to cash just yet, I’m much more regimented than I’ve ever been when it comes to investing.
I like to say that the difference between success and failure is simply having a plan – and sticking to it.
I used to just buy single 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, when to buy, and when to sell because I use a system. One that is rooted deeply in the VQ we talked about last time.
As a refresher, I have referred to the VQ (Volatility Quotient), which measures the inherent movement in a stock, “the single most important number in investing.”
You can use this number to know exactly when to buy, how much to buy, and when to sell any stock, fund, or crypto. It’s really powerful.
But we built a bigger, better system for figuring out how to deploy money into a basket of stocks, funds, or cryptos…
We call it the “Pure Quant Portfolio Builder” – and Eric Fry and I are going to talk in depth about it tomorrow night at 8 p.m. ET. (Make sure you’ve saved your spot for the event by clicking here.)
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 literally just tell it a source of stocks, a dollar amount, and how many stocks you want to buy.
And frankly, this tool is like the holy grail of investing. It gives you a portfolio of healthy stocks that is diversified, risk-adjusted, and reads like a recipe for investing that you can execute in your own brokerage account.
When I say diversified, I’m talking about performance. We want to build a basket/portfolio of stocks that can weather storms and grow over time while minimizing risk/loss. Eric often talks about the importance of intelligent asset allocation, and how diversifying your portfolio in a meaningful way is paramount to boosting your profit potential and your risk reduction,
So the diversification algorithm we built takes stocks and puts them together in a way that takes advantage of “uncorrelated” performance. This gets you real diversification to allow some stocks to fall while others gain.
In a real 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 loss and generate gains at the same time. That’s what we want – lower risk and greater gains.
And when I talk about “risk-adjusted” portfolios, that is critical to success.
When I covered the VQ, I talked about Tesla Inc. (TSLA) having a VQ around 50%. For comparison’s sake, Johnson & Johnson (JNJ), on the other hand, has a VQ around 15%. 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 put about $7,600 into Johnson & Johnson and about $2,400 into Tesla.
The reason is I want to minimize my overall risk on the $10,000 by equalizing the individual risk between the two stocks, giving my portfolio the greatest ability to generate a gain. If I put too much money into Tesla and it sharply fell (remember, its 51% VQ means it’s highly volatile and unpredictable), I could panic and lose a LOT of money.
I’m not saying you should avoid investing in risky stocks; what I’m saying is that you should invest wisely and in a risk-adjusted way for better gains.
In our system, we cover almost 30 billionaires, taking their publicly released 13F reports that track all of their trades and loading those trades into our system as well. This includes people like Ray Dalio, Warren Buffett, George Soros, and many more. In total, our system includes about 2,000 investment ideas that the world’s greatest investors put to work.
I just ran a quick Pure Quant portfolio taking the 2,000+ investment ideas from the billionaires we track and said I wanted five diversified, risk-adjusted positions spread across $50,000.
Here are the results…
You can use any source of stocks with this tool, including…
- Your favorite newsletters…
- Random stocks you like…
- All of the billionaires we follow…
- Specific sectors…
- Or even the whole stock market.
And the Pure Quant Portfolio Builder will do all 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 in your own portfolio.
Notice I said “picking the healthiest stocks” above? That’s because Pure Quant will, by default, only show you stocks that are in our Green Zone (i.e., healthy and in an uptrend).
Pure Quant is fun and powerful. It’s the only way I buy stocks now.
And at 8 p.m. tomorrow – Wednesday, Sep. 27 – Eric Fry and I are going live to show you exactly how you can make Pure Quant work for you.
We hope to see you there. Reserve your spot now if you haven’t already.
Thank you,
Keith Kaplan
CEO, TradeSmith
