How to achieve a 50% rate of return in 3 years

In my previous career as a financial advisor and developer of financial planning software, I spent over 15 years devising financial plans and advising clients on how to maximize the return on their investment while trying to minimize their taxes and any risks.   

The following simple strategy will demonstrate how an investor could achieve a return of 50% in 3 years without taking on any additional risk.

To implement this strategy we are going to use a Tax Free Savings Account (TFSA), an RRSP account and a Syndicate Mortgage.

To begin the investor would invest $25,000 into a Syndicate Mortgage project using a TFSA. Everyone is currently allowed to contribute up to $25,500 into their TFSA if they have not yet done so. The Syndicate Mortgage in this example pays an 8% fixed return over the term of 3 years, which works out to a total return 24%. In addition, at the end of the term if the project were to meet a projected profit target then an additional 12% deferred lender fee would be paid to the investor. This would bring the total return over 3 years to 36%. (24% + 12%)

 At an 8% return the Syndicate Mortgage would pay $2,000 per year in interest into the TFSA. This income is tax free to the investor and therefore each year, the investor would withdraw the $2,000 and invest it into an RRSP account (assuming that RRSP contribution room was available). If the investor was in a 40% tax bracket, he would save $800 per year in taxes or $2,400 for the 3 year term of the investment.    

Finally, at the end of the mortgage term, if the Developer achieves the profit target for the project and the additional 12% bonus interest is paid the investor would receive an additional $3,000. To maximize the investment return the investor would also withdraw these funds from the TFSA and invest it into the RRSP account. This would then produce a tax saving of $1,200. 

So let’s add it all up.

Interest income                      $ 6,000

Deferred lender fee               $ 3,000

Tax savings                            $ 3,600

Total                                       $12,600

This translates into a 50% return on your investment ($12,600 / $25,000)

Since investors in a Syndicate mortgage are registered on title and the mortgage is secured against the property an investor would not have taken any additional risk to increase their returns from 24% to 50%.

In addition, when the capital is invested into the RRSP account the investor can then reinvest the capital into another investment which would boost the overall returns even higher.

To see the calculations in detail click here or if you would like to find out how you can implement this strategy please contact me to discuss. 

VA Portfolio Update

I have just updated the Value Averaging Model Portfolio's.

There are 5 Model Portfolios to follow:

VA Growth Strategy

VA Internet Strategy

VA Market Sectors Strategy

VA Market Index Strategy

VA Small Cap Strategy

The portfolio's are all performing very well exactly as I expected, and they are meeting their annual target rate of return. 

The Internet Strategy model has performed the best out of all the models and since December 2011 has produced a annualized compound rate of return of 25.4%. Click here to see the performance in real time.

While most mutual funds managers or portfolio managers are paid to try to beat a benchmark index, we take a different approach in that we try to meet or exceed a set target rate of return consistently on an annual basis. The benchmark for the model is therefore not an index such as the S&P 500 but a fixed percentage return. This return is based on the historical long term return for that specific asset class plus inflation. For example, for Small Cap stocks it is 12% and for Technology Stocks it is 15%. If an index is beating the fund, we really don't care because eventually the index will regress to it's long term historical average.

Click here to see all the model portfolio's

I have added a recently published research study to the Valueaveraging.ca website called Performance Comparison between Dollar Cost Averaging and Value Averaging Investment Strategies and the Impacts of Investment Horizon and Target Terminal Wealth.  According to the findings, with increased length of investment horizon and/or lowered target terminal wealth, the Value Averaging (VA) investment strategy will have better performance than the Dollar Cost Averaging investment strategy.

If you have a specific stock/ETF that you would like to see how it would have performed using VA over a 5 year time frame, just send me an email request with the symbol and I will run the analysis and send you a report.

Caribbean Real Estate Opportunities Abound

In the past year and a half I have been traveling in the Caribbean looking at and evaluating real estate projects to invest in, and I must say that the opportunities for savvy investors are endless.

My trips have taken me to Cayman Islands, Bahamas, Jamaica, Anguilla, Dominica, Antigua, Barbuda and St. Lucia. I also plan to visit St Croix, St. Kitts and Nevis, Grenada, Barbados and Trinidad in the next few months.

I have looked at all types of properties and development projects comprising of marinas, hotels and resorts, golf courses and residential subdivisions that range from $2M to $1B in value. However, I believe that the current sweet spot for investments are in the $5M to $15M range.

There are a number of reasons why the Caribbean is an attractive place to invest, and these are:

1. Properties hold their value much better than properties in other parts of the world such as US and Europe. Most of the islands are small (with the exception of Jamaica, Trinidad, Cuba and Dominican Republic) therefore there is only a finite amount of good land available for development. 

2.  No threats of terrorism. Everybody knows everybody, therefore where is a terrorist going to hide.

3. Stable democratically elected governments. Most islands operate under British common law.

4.  Larger international real estate companies have ignored the smaller investments and projects, preferring to focus on “brand name” investments in the $100M plus range.

5.  Many financial institutions prefer to finance projects that are $10M or even $20M and above. Most projects under $10M are struggling to get financed. Lenders that can offer creative financing solutions that include both debt and equity financing for these smaller projects can make a lot of money.

6. There are many projects that have stalled because the financial institutions that were once heavily lending in the Caribbean have either gone bankrupt (Lehman Brothers, Icelandic Bank, Clico Investment Bank etc), changed their lending criteria, or they no longer have access to their funding sources that they once had. There are many half built projects that still have purchaser deposits on their books. With much of the initial risk in the deal (permiting, zoning, pre-sales etc) already absorbed and with the property in financial distress, there exists an opportunity to acquire substantial equity at a discount. 

7. Occupancy levels are down and many hotels and resorts are just breaking even or losing money.  There are numerous reasons for this and some of the reasons are as follows: 

·        Too much debt

·        No marketing budget

·        No websites or poorly designed websites

·       High utility costs and not making use of solar power and/or solar hot water heaters to reduce costs

In many cases some of the properties I have looked at simply need to be recapitalized in order to upgrade to solar power to cut utility costs, refurbish the property, redesign their websites and focus on marketing themselves and local activities properly.

Let me give you an example. I am currently working on acquiring a property that has the following negative features:

Currently in foreclosure and owned by a bank

Some of the rooms need upgrading

Property needs to be completely painted and landscaped

Lousy website

No marketing budget

Low occupancy levels – due to some of the above

Now here are the positive things and why I like this deal:

30 acres of prime beach front land

A fully operating hotel with restaurant facilities

30 fully serviced and approved residential building lots

479 time share owners who are paying annual maintenance fees

$13M of unsold time share inventory

Very good visitor reviews on Trip Advisor

Easy access to North America

Now here is the best part:

It can be acquired, refurbished and recapitalized, which would allow it to restart the time share program, upgrade the website and initiate a proper sales and marketing program for approximately $5.5M. 

The projected potential profit in 5 years on the whole project would be $12M which would then allow us to have a debt free, sustainable and profitable hotel resort operation.

This is only one example of several that I have like this.

So while others may only see difficulties and the negative side of things, I see opportunity.  I see the opportunity to acquire assets / equity at substantial discount to market value and build a substantial Caribbean real estate portfolio of boutique hotels, luxury rental villas and commercial projects that could have sustainable recurring revenue based on fractional and/or timeshare ownership.

I also see the opportunity to create long term employment and to support the communities that we invest in, and thereby create a win - win environment for everyone involved.

If anyone is interested in partnering with me to take advantage of the Caribbean opportunities at hand please feel free to contact me directly.


Visit my website to see more of the Caribbean projects I am working on.


P.S.  Follow me on Twitter: @BruceRamsey1

 

Value Averaging Model Portfolio's

Everyone knows how volatile the stock market has been and how uncertain the world's economies have been over the last few years. The majority of investors have made little or no money from stocks or mutual funds for a very long time. This could be because the average investor does not have a trading strategy for making money from stocks, and therefore tends to “buy and hold” then sell at a loss. However, sometimes a bad year is a bad year no matter what investment strategy you use. 

For the past 12 months we have been working on testing and fine tuning a stock investing methodology based on the Value Averaging investment strategy and we are now pleased to announce the VA Model Portfolios. Managing the portfolio‘s over the past months has allowed us to fine tune the methodology to the point where we believe that is it a viable system for trading securities.

We have created these models as a way to show / teach investors how Value Averaging works and how to apply the strategy over time. The first model is called the VA Growth Strategy and it is intended to demonstrate that Value Averaging works across broad market sectors and is particularly valuable during times of high volatility. The second model is called the VA Internet Strategy and it applies the Value Averaging methodology to the largest companies primarily engaged in the internet industry. The model is designed for investors seeking aggressive capital growth with significant volatility. Over time we will add additional model portfolios.

We use ETF’s and Index Funds with a few select stocks for the portfolios.  Using Index Funds or ETF’s is a great way to achieve very good investment results because it sidesteps flawed decision making and psychological traps. The S&P 500 beats 80% of managed funds in long term returns. Therefore the investment vehicle you choose is far more important to your investments performance than the mechanical rules you follow to invest in it. 

Simple versus Complex

The majority of investors tend to prefer the complex and artificial as opposed to the simple and unadorned. Too many investors believe that stock market investing requires sophisticated strategies, the juggling of dozens of variables and complicated portfolio management. Nothing could be further from the truth. Value Averaging is simple to understand and easy to implement, requiring less than 30 minutes a month to execute.

Warren Buffet states that, to be a successful investor does not require one to have a high IQ but rather it requires two things: 1. A strong intellectual framework on which to base your decisions and 2. Not letting your emotions corrode the framework.

When making decisions, humans tend to view everything in the present tense. We time-weight information meaning that the newest thing always carries the greatest importance. Think of the last time you really screwed up. When the mistake was made you had to contend with emotion. The mistake becomes obvious when, drained of emotion and feeling, you take a historical perspective.

Value Averaging removes the emotion from investing, all you have to do is follow the easy to understand formula based system. No rocket science involved.

Monthly Trades

Each month we will trade a $1,000,000 virtual portfolio and produce a report showing the trades done and how the portfolio has performed. We will use the services of Marketocracy.com to manage the portfolio. Marketocracy provides access to exclusive tools to build investment skills and gauge success using virtual money while adhering to very real federal compliance rules and marketplace trading constraints. Each portfolio is allocated with a virtual $1 million – enough buying power to make lots of trades and to put together a diversified model portfolio. In addition, portfolios are monitored for compliance with S.E.C. rules for mutual fund managers so we can see how they respond when they are out of compliance. All portfolios are carefully monitored and every trade tracked for investment performance.

If anyone is interested in partnering with us to create a portfolio management business around the VA strategy please contact me to discuss further. 


To see the reports and the model portfolios please visit:  


http://www.vainvestmentsoftware.com/model_portfolios.html

Recognizing Your Opportunities

"I was seldom able to see an opportunity until it had ceased to be one" - Mark Twain

“The secret to success in life is for a man to be ready for his opportunity when it comes” - Benjamin Disraeli

You just might be surprised how much opportunity is actually out there when you start to look. When you work on and start to change your perspective, and begin to look at things in a different light or from different angles and listen to different viewpoints, then you're starting to get on the right track to seeing opportunity.

An opportunity is a favorable set of circumstances that creates a need for a new Product, Service or Business. Identifying and capturing new opportunities always requires strategic change and the nature of strategic change always disrupts comfort zones.

What is a comfort zone? First and foremost it is a mental state in which people lose the momentum to pursue a vision, because they have accepted where they are as the best they need to be or do. That is why change is a big deal to people, and is so difficult to achieve. Over the years, I've learned that nothing very interesting or innovative ever emerges from a comfort zone, except more plans to make the comfortable more comfortable.

The pain that accompanies change can be financial, physical, or emotional, but regardless of the type of discomfort created by change, recession and hard economic times demand that you embrace it if you intend to remain competitive and effective.

There are 3 ways to identify an opportunity:

1. Observing Trends

Trends create opportunities for entrepreneurs to pursue. The most important trends are:

• Economic forces.
• Social forces.
• Technological advances.
• Political action and regulatory change.

It’s important to be aware of changes in these areas.

2. Solving a problem

Sometimes identifying opportunities simply involves noticing a problem and finding a way to solve it.

These problems can be pinpointed through observing trends and through more simple means, such as intuition, serendipity, or change.

3. Finding gaps in the market place

A third approach to identifying opportunities is to find a gap in the marketplace.

• A gap in the marketplace is often created when a product or service is needed by a specific group of people but doesn’t represent a large enough market to be of interest to mainstream retailers or manufacturers.

As an entrepreneur for over 20 years, and as the co-founder and shareholder of 12 companies over that time period, I am always looking for opportunities. I look for the opportunity to:

• meet and network with new and interesting people
• start a new business in my target areas of interest
• acquire more investment property
• learn more about something I am interested in
• enjoy life and spend more time with my family
• introduce people to what I do and explore the opportunities that exist in the marketplace
• make more money

There are two ways that most people fail to recognize opportunity. The first way is by not having an open mind towards new ideas on what is possible with regards to being successful and making money. The second reason is needing to know EXACTLY HOW we will achieve our goals. If you want to know every little detail and every step that needs to be taken before making a decision, you sometimes end up in what is known as “analysis paralysis”. When this happens the opportunity before you is usually long gone before you have made a decision on whether you want to take advantage of it or not. According to Dr. Martin Luther King you need to “Take the first step in faith. You don’t have to see the whole staircase before you take the first step”.

To take advantage of opportunities as they arise you must:

1. Know what you want (this is the hardest part)
2. Make a decision to do something about it
3. When you make a decision, stick with it
4. When there is evidence that your decision is wrong, change it
5. Never look back

So get a vision of what you want your future to look like. Then trust in yourself and your abilities and take a step of faith and take action, no matter what your circumstances, your friends or your worries are telling you.

If you are tempted to give up or get discouraged, remember that the temptation to quit will be greatest just before you are about to succeed. All success is based on long-term commitment, faith, discipline, attitude and a few stepping stones along the way. You might not like the stone you are on right now, but it’s sure to be one of the stepping stones that lead to great opportunities in the future. In order to succeed you have to start before you are ready.
. 

Today’s the day... seize your opportunity.

P.S. The pictures below show Warren Buffet and I in 1994 at a baseball game in Omaha Nebraska. This was a time when very few people knew who who he was. What a great opportunity to spend a little time with the world's greatest investor.

WHAT IS FAITH?

“Take the first step in faith. You don’t have to see the whole staircase before you take the first step”. Martin Luther King

There are two ways to approach life, one is to live by sight and reason and base everything on what you see, this is how most people live. The other way is to live by FAITH, which is to base everything on what you can’t see. Faith is the confidence that what we hope for will actually happen, it gives us assurance about things we cannot see. All faith begins in belief, and the reward of faith is to see what one has believed.

So the question is, what must you believe in order to have faith?

Consider the following quote, “Whatever you are seeking is also seeking you. Whenever you act in complete faith and confidence, everything will unfold when and as it should.”

The method by which one develops faith, where is does not already exist, is extremely difficult to describe. Almost as difficult as it would be to describe the colour red to a blind person. Making repeated affirmations to your subconscious mind is the only known method of developing the emotion of faith voluntarily. Any impulse of thought which is repeatedly passed on to the subconscious mind will eventually be accepted and acted upon. All thoughts which have been emotionalized (given feeling) and mixed with faith begin immediately to translate themselves into their physical equivalent or counterpart. You will become as small as your controlling desires or as great as your dominant aspiration.

In it’s simplest terms, Faith requires action. It is the application of faith in yourself, your faith in your fellow man, your faith in opportunities that are available, and your faith in God under any circumstance.

If you have no faith then it is possible to induce it through Persistence. Persistence is the sustained effort necessary to induce faith. Since persistence is a state of mind it can be cultivated, and like all states of mind, the basis of persistence is the Power of will. When you mix willpower with persistence then you will achieve your objective.

In the book “Think and Grow Rich”, Napoleon Hill states that there are four simple steps that will lead to the habit of persistence. They call for no great amount of intelligence, no particular amount of education, and little time or effort.

The necessary steps are:

1. A definite purpose backed by a burning desire for its fulfillment. Knowing what you want is the first and perhaps, the most important step toward the development of persistence. A strong motive forces you to surmount many difficulties.

2. A definite plan, expressed in continuous action. Organized plans, even though they may be weak and entirely impractical, encourage persistence.

3. A mind closed tightly against all negative and discouraging influences, including negative suggestions of relatives, friends and acquaintances.

4. A friendly alliance with one or more persons who will encourage you to follow through with both plan and purpose. Get a mentor, someone who believes in you who can help guide you towards your goals.

H.L. “Bunker” Hunt, the Texas oil billionaire when asked in an interview about the secret of his success replied, that he believed there were only two things necessary to succeed. The first is that you have to decide on exactly what it is you want. This is the starting point and, in his estimation, this is where most people fail. They never decide what it is they really want. He observed that most people wander through life wanting a great many things but not wanting any one thing more than all the rest. They end up settling for far less than what could be theirs. Once you decide on what you want, he continued, the second thing you must do is determine the price you must pay to get it, then resolve to pay that price. However, many who get past the first step never get past the second. They never realize there is a price you must pay for success, and they are not willing to pay it.

Only a big challenging goal can provide meaning and purpose to your life. It gives you something to aim at, to work toward and to look forward to. Without a goal, you will wander around like a chicken without a head, with no direction attached to your efforts. Since you cannot measure any progress, you cannot feel any sense of accomplishment. Calvin Coolidge, 30th President of the United States once said “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan "Press On" has solved and always will solve the problems of the human race.”

So whenever you are facing challenges in achieving your goals or dreams remember to repeat to yourself, I will persist without exception, I am a person of great faith.

Till the next time

Bruce

Believe in yourself! You’re divinely designed

And perfectly made for the work of mankind.

This truth you must cling to through danger and pain

The heights man has reached you can also attain.

Believe to the very last hour, for it’s true

That whatever you will you’ve been gifted to do.

Believe in yourself and step out unafraid

By misgivings and doubt be not easily swayed.

You’ve the right to succeed, the precision of skill

Which betokens the great, you can earn if you will!

The wisdom of ages is yours if you’ll read

But you’ve got to believe in yourself to succeed.   Anon

Have You Remembered All of Your Gifts?

As parents we delight in giving gifts to our children because we love them and want to bless their lives. Our delight is doubled when we see their eyes and hearts light up with joy. Our delight is tripled when we hear from their lips words of gratitude and appreciation.

Our heavenly father delights in blessing us, but his joy and our own joy at receiving his gifts, is not complete until we express our sincere thanks from the depths of our hearts.

“A spiritual gift is given to each of us so we can help each other. To one person the Spirit gives the ability to give wise advice; to another the same Spirit gives a message of special knowledge. The same Spirit gives great faith to another, and to someone else the one Spirit gives the gift of healing. He gives one person the power to perform miracles, and another the ability to prophesy. He gives someone else the ability to discern whether a message is from the Spirit of God or from another spirit. Still another person is given the ability to speak in unknown languages, while another is given the ability to interpret what is being said.  It is the one and only Spirit who distributes all these gifts. He alone decides which gift each person should have.” (1 Corinthians chapter 12 verse 7-11)

It’s important to know and recognize our gifts and our graces. That is, it’s important to know what we are really good at - our fundamental abilities that would bring to bear in any kind of task. It’s also important to know what special abilities God has given us.

You have all that the greatest of men have had

Two eyes, two ears, two hands, two feet

You have all that the greatest of men have had

Whether they were explorers or scientists or builders or speakers or motivators

They came here with no more or no less than you

The difference between the mighty and the mundane

Is what you do with what you have.

In the book The Ultimate Gift, author Jim Stoval writes, life is a gift that has been given to us. The way we live it and maximize it is our gift to those around us. The following is a list of just a few of life’s gifts that we all can enjoy:

1. The Gift of Work: He who loves his work never labours

2. The Gift of Money: Money is nothing more than a tool. It can be a force of good, a force of evil or simply be idle.

3. The Gift of Friends: It is a wealthy person, indeed, who calculates riches not in gold but in friends.

4. The Gift of Learning: Education is a lifelong journey whose destination expands as you travel.

5. The Gift of Problems: Problems may only be avoided by exercising good judgment. Good judgment may only be gained by experiencing life’s problems.

6. The Gift of Family: Some people are born into wonderful families. Others have to find or create them. Being a member of a family is a priceless membership that we pay nothing for but love.

7. The Gift of Laughter: Laughter is good medicine for the soul. Our world is desperately in need of more medicine.

8. The Gift of Dreams: Faith is all that dreamers need to see into the future.

9. The Gift of Giving: The only way you can truly get more out of life for yourself is to give part of yourself away.

10. The Gift of Gratitude: In those times we yearn to have more in our lives, we should dwell on the things we already have. In doing so, we will often find that our lives are already full to overflowing.

11. The Gift of a Day: Life at its essence boils down to one day at a time. Today’s the day!

12. The Gift of Love: Love is a treasure for which we can never pay. The only way we keep it is to give it away.

13. The Ultimate Gift: In the end, life lived to its fullest is its own Ultimate Gift.

As we come to the end of the year we should take the time to remember and reflect on all of the things that we have to be grateful for. When we were sad, God sent a comforter. When we were sick, he was our healer. When we were alone, he was our friend. When we are confused, he is your counselor and guide. When our heart was lost in sin, he sent his son to save us.

Hope you have a very great Christmas holiday and a Happy New Year.

Till the next time

Bruce

A Radical New Approach to Personal Investing - Part 2

For the last 10 years, investors have not made any headway in increasing the value of their investment portfolios, in fact the last ten years (2000-2010) is now commonly being referred to as “the lost decade”. This has led many investors to become disillusioned with the stock markets and their financial advisors.

The following excerpt is taken from a recent post by The American Association of Individual Investors (AAII) does a good job of explaining why this has happened.

“Diversification benefits have become harder to achieve. Increased similarities in the performances of asset classes have raised risk levels and made it more difficult to achieve improved risk-adjusted returns by relying solely on asset class and sector selection skills.

At issue is asset class correlation, a term that describes how close the total return of one asset class (e.g., large-cap stocks) is to that of another (e.g., commodities). A correlation of 1.0 means returns are identical, both in terms of the direction and the degree of the change. A correlation of -1.0 means returns are mirror opposites. The lower the correlation ratio is, the higher diversification benefits are. In a perfect world, you want investments that zig when your other holdings zag.

Unfortunately, the world is far from perfect and correlations are moving closer to 1.0 instead of further away from it. Sam Stovall, Standard & Poor’s chief investment strategist, quantified this shift in a report published earlier this year. This shift means asset classes are now more likely to move in the same direction than they historically have.

The table below shows his calculations.

If you are among those who feel like they’ve been doing everything right but aren’t making any headway, this merging of correlations may help to explain why. As asset class returns have more closely mimicked each other, it has become harder to reduce risk by combining a variety of investments within one’s portfolio. In more blunt terms, a downward move by domestic large-cap stocks now has an increased chance of dragging down emerging market stocks, REITs and commodities with it. Thus, it is harder to hide from the market’s dark side.

The performance bonus from minimizing risk for a given level of return (a key tenant of modern portfolio theory) has also been reduced. This, in no doubt, is driving professional portfolio managers nuts.

As gloomy as this all sounds, realize that diversification still a good thing. As the numbers published by Stovall show, returns are not completely correlated. It’s just that the distance has become considerably shorter than it historically has been”.

I am sure you have seen this merging of correlations when stock markets around the world rise and fall due to the globalization and linking of the world’s economies.

So, what do you do about this?

First, accept the fact that we are in a difficult investing environment.

Second, realize that times have changed and a new approach to how you invest in stocks is required. Based on this point I have written a research paper called “How Value Averaging Adds Value – Achieving Investment Goals in Tough Economic Times”.

Based on the research and investment strategy developed by former Harvard university professor Michael Edleson, I conducted a study with regards to how investors would have done had they used the value averaging strategy to save for their investment goals. In order to conduct the study I created a powerful web-based software system that allows me to back test the value averaging investment method, over any time frame, using historical data for any North American Stock, ETF or US based mutual fund. The program also compares the results of Value Averaging against Dollar Cost Averaging.

The results of the study has revealed that if investors were using the value averaging strategy over a 5 to 10 year time frame, there is a high probability that they would have achieved their savings or retirement goals while outperforming the market indexes. This would have been possible even with the high volatility and declining stock markets over the last 5 -10 years.

In the new year we will look at rolling out a portfolio management service that will teach investors how to use this investment method in order to meet their investment savings goals.

To read the research report click here

To learn about the software click here


Till the next time.


Bruce

A Radical New Approach to Personal Investing - Part 1

In the book the book "The Perfect Portfolio" author Leland Hevner states that the investing environment that we, as individual investors, face today is not a friendly place. Equity prices are buffeted by factors that were inconceivable just a few years ago. Yet while markets have changed dramatically, the investing theories, methods and resources we have available to cope with them have not.

The time has come to pause, take a deep breath and rethink in totality how we view and interact with the equities/stock markets. It is time to recognize that much of what you have been taught about how to invest has changed. To survive and thrive in today’s new investing environment, a completely new approach to personal investing is needed. This new approach is the subject of this article.

In the good old days (not many years ago), investors had a reasonable chance of predicting stock prices by analyzing company financial statements. Investors had a legitimate chance of being successful by doing their homework using basic equity analysis methods and tools. Unfortunately those days are gone. Today a host of factors influence stock prices that have nothing to do with corporate fundamentals, and these factors are almost impossible to analyze using the resources available to us.

What are these new factors?

Let just look at a few:

The internet. The vehicle of mass communication has changed everything. Information (good and bad) travels so fast that anyone with an internet connection can cause millions of people to make uninformed trading decisions and in this manner manipulate stock prices easily and cheaply.

Short selling attacks. Short selling is a major factor that can dramatically influence the price of any stock. A short attack can destroy the value of a stock, and there is no way that individual investors can predict which companies are going to be affected.

Government activism. Government intervention in the free market system can dramatically affect stock prices in either direction.

Speculation. Speculative price swings in assets such as oil, gold, food etc have significant effect on the health of the overall economy. These price movements are not attributable to factors that can be analyzed with any degree of confidence.

In the face of these new market dynamics and the inability of existing investing tools to deal with them, what can the individual investor do? You have three choices.

1. Do nothing and hope for the best. Hopefully you are smart enough not to take this option.

2. Develop revised theories, methods and tools to analyze these new market influences. This is extremely difficult if not near impossible.

3. The most logical choice is to develop an updated and improved approach to personal investing.

The current state of personal investing

Today, investors are confused and often intimidated by the world of personal investing as it currently exists. When seeking to learn how to cope with this new world, they are confronted with hundreds of investing books, countless newsletters, non stop seminars, sales pitches from financial advisors and a constant barrage of information from the talking heads on TV and the financial media.

The world of personal investing today is simply overwhelming for the average person trying to protect and grow their savings. When confronted with this chaos, most people simply give up in despair and either cash out of the stock market and put their money in the bank in low interest deposits, or do nothing and just watch and hope that the market will eventually rise and they will recoup their losses.

What is needed is a simplified approach to investing. One that frees you from the tedious process of analyzing individual stocks and mutual fund styles. One that is logical and easy to understand. One that meets your unique needs and is responsive to changing market conditions. In short, it fixes what is broken in today’s personal investing market.

This new approach will empower you to become more personally involved in the investing process and easily make investing decisions with confidence. My 20 plus years of experience working in the financial services industry and working with investors has shown me that in order for this new approach to work it must:

1. Be easy to understand

2. Be simple to implement

3. Be easy to monitor and change

4. Be responsive to changing market conditions

5. Be customizable

6. Enable superior returns without excessive risk

In Part 2 of this article I will reveal a recently completed study on a strategy that I have been working on for the last eighteen (yes 18) years. This research and strategy has been made possible because of a very powerful software program that I have just completed developing. This software has allowed me to back-test this investment method, over any time frame, using real historical data from any North American Stock, ETF or US based mutual fund. The results have been amazing.

You are about to learn an approach to personal investing from a totally different angle, one that defies tradition. You will need an open mind to appreciate and absorb this paradigm shift. Stay tuned.


Bruce

Discovering Your Genius

In the book “The Success System That Never Fails”, author W. Clement Stone states that the start of all personal achievement starts in the mind of the individual. Your personal achievement starts in your own mind. The first step is to know exactly what your problem, goal or desire is. Most people don’t get what they want because they don’t know exactly what they want. If you are not clear about what you want, then write it down and then rewrite it again until the words express precisely what you are after.

All success hinges on the 3 things listed below. Once you truly understand what they mean, you’re on your way to a golden future.

1. Inspiration to Action

The road to success starts when you are inspired to make the effort. Inspiration starts when you are motivated to dissatisfaction with things the way they are. Therefore, inspirational dissatisfaction is the strongest single force in your success system that never fails. Inspiration to action can also be described as having a burning desire. Desire is the beginning of all human achievement.


2. Know-how

Know-how is the quality that enables you to do something at will, with skill, effectiveness and a minimum use of time and effort. Know-how always accomplishes what it sets out to accomplish. Know-how gets things done while people are wondering if they can be done. Know-how built the pyramids of Egypt and the great cathedrals of Europe, it flew the Atlantic and split the atom, it harnessed electricity and put a man on the moon. And it can bring success to you. How do you get it? You don’t get it, you accumulate it, by doing … by experience…by action…it comes to you. When you have it, you will know it and you’ll know its power.

3. Activity Knowledge

Knowledge is knowing about something, know-how is knowing how to do something. Knowledge is information, know-how is technique. You need both. Knowledge is gained anywhere and everywhere. It can be acquired from books, people, things, happenings, history and casual observation. But to be useful it must be organized. You must know what you know. So how does one acquire activity knowledge? By doing what you are afraid to do. When you run away because you are afraid of doing something big, you pass opportunity by. Two self motivators to help you acquire knowledge are: Ask advice from the person who can help you, and It’s never too late to learn, so don’t stop learning.

There are those who have knowledge and know-how, but they don’t succeed. For although they know what to do and how to do it, they don’t feel like doing it, they lack motivation. They are not inspired to action. Therefore inspiration to action is the most is the most important ingredient to success in any human activity .The person who is inspired and motivated can overcome all obstacles.

Motivation is that which induces action or determines choice. It is that which provides a motive. A motive is the “inner urge” within an individual which incites him/her to action, such as an idea, emotion, desire or impulse. It is the hope or other force which starts in an attempt to produce specific results. When strong emotions such as love, faith, anger and hate are mixed they generate an intense driving force that will last through out a lifetime.

So how do you become motivated and inspired to action? How does one develop ambition when you’re not ambitious? How does one develop initiative when you don’t have any? The answer lies in discovering your genius.

Discovering your genius

Every person has a unique genius. You have unique talents, abilities, interests, and values that only you can bring into greatness. You have a destiny that only you can fulfill. Expressing your genius is knowing what you want to do with your life and doing it because it expresses who you really are.

Here are the 4 characteristics of people who have discovered their genius:

Passion: They love what they do. If they weren't getting paid they would do it for free

Talent: They are good at what they do. Call it talent, ability or genius - they've got it.

Values: Doing what they do is extremely important to them.

Destiny: They have a sense that they are doing what they were born to do - making their own unique contribution. It's almost a spiritual thing. It's their destiny.

Create your GENIUS LIST. Once you have created your list you should have a good idea of what you want and be well on your way to success.

PASSION

What do you love to do?

What activities give me satisfaction?

What excites me about life?

What is my secret ambition?

What are my hobbies?

TALENT

What am I good at?

What do I get complemented on?

Where have I excelled in the past?

Where have I been successful?

What are some of my strengths?

VALUES

What is important to me?

What would I do if I were wealthy?

What do I stand for?

What won't I stand for?

What would I risk my life for?

DESTINY

What was I born to do?

What is my unique mission in life?

What does God want me to do?

What are my unique opportunities?

Where can I make a difference?

Who is my soul mate and why?

There is an old Hindu legend stating that when the gods were making the world they said: “Where can we hide the most valuable of treasures, so that they will not be lost? How can we hide the most valuable of treasures, so that they will not be lost? How can we hide them so that the lust and greed of men will not steal or destroy them? What can we do to be assured that these riches will be carried on from generation to generation for the benefit of all mankind?”

So in their wisdom they selected a hiding place that was so obvious it wouldn’t be seen. And there they placed the true riches of life, endowed with the magic power or perpetual self replenishment. In this hiding place these treasures can be found by every living person in every land who follows The Success System That Never Fails. Do you know where the hiding place is…?

TODAY IS THE DAY FOR YOU TO GET STARTED… DO IT NOW