Five Ways to a Wealthier Future

A Better Wat To Wealth Click here to unsubscribe.  Click here to view this email in your browser.  Hi there! Tim Melvin here again.   Thank you again for joining me at A Better Way to Wealth!   As promised, today I'm going to give you my top five proven strategies that will help you earn higher inflation-adjusted returns than you ever thought possible.   In each issue of A Better Way to Wealth, you'll get actionable stock ideas with explosive potential thanks to these five strategies.   Sometimes we'll cover multiple stocks within one strategy. And other times, we'll look at a single stock that fits into more than one strategy… All the better!   The key thing to remember is that once you learn to put these strategies to work in your own portfolio, you'll be on your way to doubling your net worth sooner than you ever thought possible.   There's a lot to cover. So without further ado, let's get right to them...   Momentum   There are plenty of Momentum strategies out there, but mine is unique and proven to result in better returns.   Here, I look at stocks that are outperforming relative to the benchmark S&P 500 index.    For example, if hypothetical stock XYZ returned 50% during the same time the S&P 500 returned 25%, XYZ is said to be outperforming the market.   These are stocks that are moving up slowly and steadily, forming green candle after green candle on the stock chart.    Momentum stocks on the move will have very few red down-day candles along their upward trajectory.   Momentum stocks will typically have strong and consistent institutional buying -- think hedge funds and pension funds that are putting billions of dollars to work each and every day.   When these players start to accumulate a lot of stock shares, that's when you'll see all those bullish green candles start to form.   We want to ride this momentum until it stops, and we never overstay our welcome. When the stock stops going up, it's time to get out.   Cheap Earnings   Next up is what I call the Cheap Earnings strategy.    Here, I'm focused on companies with strong and rising earnings numbers…   You know, the numbers that companies are required to report each and every quarter.   Stocks that are mispriced in relation to their strong quarterly results are said to be undervalued, and they have lower-than-average price to earnings (PE) ratios.   The PE ratio is a common calculation that divides the total market value of a company by its total earnings, which results in a figure that can be used by investors to determine whether a company is overvalued or undervalued.   Sometimes a stock is undervalued for a reason… It could very well be a piece of junk.   But by combining a relatively low price to earnings ratio with other financial metrics I follow, such as price to free cash flow, price to net asset value, etc., we get a much better picture and are able to filter out the junk companies.   What we're left with are stocks that are increasing their earnings without a commensurate increase in the stock price.    That means they are "cheap" and are likely to appreciate as investors begin to pay up for those rising earnings.   Cheap Assets   I also like to focus on stocks that fit my Cheap Assets strategy.    When I can buy companies for less than the value of the assets that they own, I put myself in a good position to make money.    While the market may be a beauty contest in the short term, in the long run it becomes a "resource conversion machine" in many cases.   If we can buy companies for less than what they own, whether that be real estate, oil and gas, mortgages, commercial loans, investment portfolios or even cash in some cases, buyers will emerge to push those shares back up towards the actual value of the assets.   The most widely used measure of asset value is book value. That's nothing more than the net worth of the company. You add up what they own, subtract what they won and the result is book value.   Then, we divide that by the number of shares outstanding and that's book value per share.   I like to use tangible book value. Intangible assets are things like goodwill or brand value that may or may not have actual value to a potential buyer of the company.    I stick to things that are tangible, such as loans, real estate, property, plant and equipment, securities, cash and other tangible assets. And if the intangible assets turn out to have value, that's a bonus on top.   Income   I absolutely love dividend-paying stocks. I always have, and I always will.    One of the key characteristics of major winning stocks is that they pay steady and growing dividends.   Those dividend payments, whether they are monthly, quarterly or yearly, represent consistent Income for your portfolio.   But not all dividends are created equal. Some dividend payments actually destroy the value of the companies paying them out.   If a company is not bringing in sufficient earnings and free cash flow to cover those dividend payments, they are not doing their investors any favors.   The key is to know which companies can support steady and rising dividend payments so that you can generate consistent income by taking a position in the stock.   Special Situations   This is a broader strategy than the first four on the list, as Special Situations include endless scenarios that stocks and companies might find themselves in.   For example, I mentioned above that Momentum stocks often have a lot of insider buying among executives and management. Well, sometimes insider buying can be a Special Situation on its own.   Let's say we see a large number of shares purchased by the CEO of a company.   If the purchase is large enough, or if the purchase follows a string of earlier purchases of the stock, you can bet that the CEO knows something good is about to happen for the company.   Alternatively, if you see company insiders dumping their own shares, that is not a stock you want to own.   Then, there are other Special Situations, such as IPO lock-up expirations, liquidations and spin-offs.   Depending on the company and the specific situation, these can present excellent buying opportunities.   If you know where to look and what you're looking at, regular investors like us can make massive gains in short order.   It's Time to Get Started   Once again, each issue of A Better Way to Wealth covers one of these strategies and the best stocks to play it.   And each stock has been vetted by me through the lens of one or more of my top five wealth-building strategies.   With all of the back-testing I've done on these strategies throughout my career, I'm confident that I can help your portfolio grow by leaps and bounds over the next 12 months.   Thanks for reading. I'll talk to you again tomorrow morning!   For a better way to wealth,   Tim Melvin ©2021 A Better Way to Wealth 14422 Shoreside Way Suite 110-238 Winter Garden, FL 34787   You are are recieving this message at stevenmagallanes520.nims@blogger.com because of your subscription to A Better Way To Wealth. You may unsubscribe anytime here