The different market approach used by the One Percent … expanding your portfolio beyond just stocks … adopting a different market approach within your stock portfolio
Not long ago, legendary investor Louis Navellier recommended his private clients invest in a stock called Baozun.
Over the next five months, it shot up 159%.
Another pick Louis recommended, Ultra Clean Holdings, rocketed 225% higher in less than a year. A third pick – Big 5 Sporting Goods – returned 433% in under 12 months.
Last week, Louis held an event that detailed how investments like these produced their outsized returns. He called it the One Percent Event. The name references the top 1% of earners in the U.S.
Louis is among that group, as are his high-net-worth clients (beyond his newsletters here at InvestorPlace, Louis runs a private wealth advisory service).
Louis’ event dug into how these One Percenters invest differently. It’s not your traditional, long-term buy-and-hold approach.
Without taking big risks, it enables anyone to earn 200%, 300%, even 500% or more in less than a year… which translates to massive cash payouts.
This is why the rich never worry about inflation or outliving their money… and how they can pay for luxuries even in bear markets.
If you missed the event, I encourage you to watch the free replay. Louis goes into greater detail on how investors like you and me can adopt the same market strategies used by these super-wealthy investors.
Today, let’s expand on this idea of “what the One Percent do differently”
While we can’t cover the details of Louis’ event, we can expand on the idea of how the One Percent approach wealth-building with a different mindset.
Part of the difference is they don’t limit their investments to just stocks and bonds. They allocate their money to a wide assortment of alternative asset classes.
For years, this was a key advantage they held because many alternative asset classes weren’t available to investors like you and me. That was usually due to the exorbitant capital requirements or governmental regulatory hurdles.
Today, regular investors can take part, leveling the playing field.
Consider the potential benefit…
If your entire nest egg has been tied up in stocks this year, you’re probably down substantially.
But an investor who has wealth in stocks, but also residential real estate, commercial real estate, fine art, collectibles, wine, private investments, and so on, has suffered far less – possibly even seen that wealth grow this year.
So, let’s springboard from Louis’ One Percent Event to look at how you can diversify and grow your portfolio, even if it’s of modest size.
The new world of “One Percent” investing now available through tokenization
Most of the new investment options we have available to us today come courtesy of tokenization.
To put it simply, tokenization is the process of converting rights – or a unit of asset ownership – into a digital token which trades like a stock or bond.
For example, say you have an apartment building valued at $2 million. Tokenization could transform it into 2 million tokens (the number of tokens is arbitrary). So, in this case, each token would represent a 1% share of this apartment building.
Investors can then buy and sell these tokens on a central exchange, similar to how we trade stocks and bonds.
Let’s look at a real-world example with art.
Financial advisors love to point toward the long-term average returns for the stock market.
For the 26 years between 1995 and 2001, that number clocks in at 10.2% annualized (for the S&P 500).
It might surprise you to know that over that same period, contemporary art returned 13.8% annualized.
On a cumulative basis, contemporary art prices crushed the S&P by more than 130% over that period.
To a returns-focused investor, wouldn’t it make sense to have some wealth allocated to this outperforming asset class?
So, let’s get specific – how can you invest in contemporary art?
One of the leading platforms is Masterworks.
(InvestorPlace has no affiliation with Masterworks. In fact, we have no relationships with any of the companies we’ll highlight today. They’re purely illustrative. Each alternative asset class we cover today offers many different platforms. We encourage you to research them to find the right one for you.)
Masterworks offers the opportunity to invest in works of art from Banksy, Basquiat, Kaws, Picasso, Warhol, and more.
In terms of returns, in January of this year, the platform sold George Condo’s “Staring Into Space” for $2.9 million. Globe Newswire reports that investors in this offering received an estimated 31.7% internal rate of return (IRR) net of fees.
That follows 2020’s sale of Banky’s ‘Mona Lisa.’ That returned a net 32% IRR for Masterworks investors.
Overall, Masterworks has had eight exits to date, with an average annualized return, net of fees, of 27%.
Check out Masterworks.com. Other platforms available to you include Maecenas.co and Yieldstreet.com.
But contemporary art just scratches the surface of the alternative asset classes now available to you
A moment ago, we mentioned real estate.
Historically, real estate has had huge barriers to entry in the form of high minimum investment requirements. As such, generally only ultra-high net worth individuals and institutions have been able to participate.
Not anymore, thanks to tokenization.
It’s no longer “do I have enough to invest in real estate?” The better question now is “what’s the specific way in which I want to invest in real estate.”
For example, are you interested in private residential real estate?
Well, check out Invest.groundfloor.us. The platform claims it has averaged 10% annual returns for investors over the last seven years from real estate lending.
Don’t want to go the debt route? More interested in homes offering rental income and equity appreciation? Well, for you, there’s Arrivedhomes.com.
I’m on their website now, looking at a rental property in Arkansas featuring 7.5% annualized rental income. It appears this specific property has been in Arrived’s portfolio for 17 months, and now boasts a 94.6% total annualized return.
Or perhaps you prefer commercial real estate over residential.
Well, you might be interested in Fundrise.com. It offers investors a way to diversify into institutional-quality real estate. Apparently, the platform has already paid out more than $226 million in net dividends to its investors.
But the investment options available are nearly endless now, thanks to tokenization
Want to invest in fine wine? Great! There’s Vint.co.
Investors recently poured their money into a rare collection of Domaine De la Romanee Conti valued at $137,000.
Do you prefer collectibles? Check out Rallyrd.com.
The platform reports it will soon enable investors to buy into a 1940 DC Comics Batman #1.
Or how about diamonds? If that’s more your speed, look at Luxusco.com.
As I write, you could invest as little as $300 into “The Golden Dahlia,” an 11.74 carat, rectangular emerald cut diamond valued at $1.5 million.
By the way, consider how inflation over the last 12 months has impacted hard assets like these.
These collectibles have pricing power. In other words, inflation doesn’t hurt them – it just makes their market prices climb even higher.
By the way, we haven’t even mentioned investing in private companies, where you might find tomorrow’s Uber, Google, or Facebook. For that, two options are AngelList.com or Republic.com.
I hope your eyes are opening to the vast world of alternative investment classes that are out there. This is, in part, how the One Percent diversify and grow their wealth, decade-after-decade.
We’ll end today by circling back to Louis
Though I encourage you to investigate the various asset classes we’ve briefly covered, let’s return to our bread-and-butter – stock investing.
What does Louis do differently with his high-net-worth clients?
Here he is from his recent One Percent event with more details:
This is the income secret of the One Percent…
To make the kind of incredible income that enables them to afford pretty much anything they want, we invest in stocks. But, not just any type of stock.
There’s an incredible type of stock they use to produce income we call Phase 2 stocks. These stocks have nothing to do with dividends. Phase 2 stocks can shoot up at an incredible rate, handing folks massive gains in a short time.
This is something I’ve been advising my rich clients to do for a while now, and the results have been incredible.
We’re running long so we’ll wrap up here. But you can watch the free replay from Louis that digs into all the details right here.
I encourage you to check it out, and also explore some of the alternative asset classes we’ve discussed today.
Diversifying your portfolio is no longer a luxury reserved for the One Percent.
Have a good evening,
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