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Your Financial Guide for All Seasons

My mission in Profitable Investing is to help you safely earn top returns on your investments, using total return recommendations. That means I choose top-quality stocks and funds with solid dividends. These are shareholder-friendly companies that are always in the best strategic sectors the markets have to offer.

Whether you’re just starting a career or are a retiree enjoying the fruits of a life’s labor, you can benefit from this unique approach to long-term wealth-building based on safe growth and ample income-generating investments.

I have structured the recommendations in the model portfolios so that they have a broad collection of quality stocks and funds that generate both growth and income. These recommendations are appropriate for all investors.

So, whether you’re just building a portfolio or are a seasoned investor, I have a balanced approach with allocations. And the individual recommendations in my portfolios will work with less risk and reliable returns, regardless of market conditions.

There’s a myth in the markets that somehow, income stocks aren’t growth stocks or dynamic enough for younger investors. That’s simply not true. Income-generating investments are important for all investors and not just those that are nearing retirement.

Before my career as a bond trader, I started off with a paper-trading account at age 10. By age 12, I had my own real-money account where I invested in income stocks and funds. Those investments have continued to pay off ever since, which allowed me to retire by my mid-30s.

The great thing about income investing is that the distributions can be piled up, re-invested or deployed in additional investments, all growing your portfolio.

And that income also works to offset downturns in the market, as income-generating investments tend to do better during challenging times. And of course, that extra income is nice to have when your free time expands.

My goal at Profitable Investing is to make 7%–10% per year on the main Total Return Portfolio over the longer haul—often 15%–20% (or more) in particularly good years. More importantly, you can expect to chalk up those gains safely, with less nerve-wracking volatility so many investors needlessly accept.

By following my portfolio guidelines, you can look forward to earning ample income (to meet your living expenses in retirement) while your principal keeps growing (to offset inflation).

Of course, if you don’t need current income, reinvest your dividends and interest back into your investment accounts, and you’ll reliably build your wealth even quicker.

That’s what thousands of Profitable Investing subscribers have done over the years. As Ben Franklin said, “Money makes money; and the money money makes makes more money.”

I’ll add my own adage, which is that I’ve never met anyone who has gone broke with regular checks coming in as income.

Income is a very powerful investment tool.

New Subscriber Q&A

Now, let me share the answers to the questions I’m most often asked by new subscribers:

Q: I already own quite a few investments. Should I sell them to buy your recommendations?

A: I don’t want you to rush into selling anything. Your very first step is to consider whether your portfolio is properly balanced. Take a quick inventory of what you own. And let me also introduce you to a practice that I use myself:

Each month when you review your investment statements, go down the list and for each investment ask yourself if you would buy it all over again now. If you can’t answer in the affirmative, then it’s time to sell and move on.

Also, ask at what price you would buy it, and if the market is above that level, then perhaps it’s time to review it to see if it has run its course.

I do this for each model portfolio in every issue of Profitable Investing. I ask those same questions and follow my disciplines. If I’m uncertain, then I place a recommendation on Hold and pledge to resolve it to be a Buy or Sell in short order.

Once you’ve figured out your current asset allocation, ask yourself how it meshes with your own tolerance for risk. Generally, I aim for a mix of about 60% stocks, 40% bonds, give or take 10%–15% depending on market conditions.

But older investors may want to increase their allocation to bonds and cash if more income is needed, just as younger investors with longer time horizons may have the risk tolerance to increase their stock allocations for underlying growth over time.

The asset weightings I mentioned work well for a broad swath of my readers who are looking for growth plus safety. If you’re like my “typical” subscriber (age 40–70), or even a little older or younger, you’ll probably feel quite comfortable with my prescribed mix of stocks and bonds.

But remember, I’m not trying to squeeze you into a mold. You can shape your own portfolio to be more aggressive or more conservative than my allocation recommendation.

If you find your current holdings are way out of line with my recommended portfolio allocations, you may need to make some adjustments.

With my percentage weightings as your guide, gradually sell off your laggard investments in each category (utilities, real estate investment trusts (REITs), growth stocks, bonds, etc.).

Replace your poor-performing deadwood with stocks and bonds—or funds—that I’ve selected for you in my Total Return Portfolio.

I define deadwood as any investment that hasn’t lived up to the hopes you had for it over the past two years or more. I believe in being patient, but in my experience, investments that don’t straighten out in two years are seldom worth waiting for any longer.

Never hold and hope.

Too many investors own a stock that’s down, and they will hold it hoping that if it just moves up a bit, they’ll sell. But instead, these hold and hope investments tend to only get worse.

Q: If I send you my portfolio, could you give me more specific advice, such as what to sell or hold?

A: I wish I could, but it’s against SEC regulations, and it’s not prudent for either you or me to practice private portfolio analysis by mail (or email). I would need to know too many facts about your private situation, not just your portfolio holdings.

But please do send me your general investment questions as well as your comments and suggestions. I review all your letters and answer as many of your specific questions as I can, especially those about investments I’ve recommended.

In fact, you’ll notice that I answer dozens of subscriber letters each year in Profitable Investing and many more in the weekly Journal.

Send your questions to me at feedback@investorplace.com and note in the subject line Profitable Investing or Neil George.

Please understand that I get hundreds of emails every week and cannot answer all of them personally, but my team and I do read them all and answer as many as we can. If you don’t receive an answer, don’t worry. We have read your question and may be considering it for a future Journal or issue of the newsletter.

And each month I host a live webinar on the markets and my recommendations, which also includes a lot of time for direct Q&A. As a subscriber, you’ll receive your invitation via email.

Q: How can I get started if I’ve got less than $10,000?

A: Inside the model portfolios, I have a collection of funds and exchange-traded funds (ETFs). My investment style is to identify major market sectors in stocks and fixed income that will benefit from specific economic and market developments.

Then, I find the appropriate individual stocks, bonds and other securities that are leaders in their performance and prospects.

But, for smaller portfolios, perhaps inside retirement accounts or for newer investors, ETFs and other funds make for great surrogates for individual securities. This is why I use the same overall weightings between stocks, fixed income and cash for the Model Mutual Fund Portfolios as I do for the main Total Return Portfolio.

I then identify and recommend individual sector ETFs and other funds to meet similar allocations for sectors represented in the Total Return Portfolio with individual securities.

So, for accounts domiciled at specific fund companies such as Fidelity or Vanguard, I maintain the All-in-the-Family Portfolios, which can easily work with smaller sums. And similar are the holdings in the other fund portfolios, particularly in the Hassle Free ETF Portfolio.

Then, once you’ve got this diverse foundation laid, start adding individual stocks to your portfolio by using the top Total Return Portfolio picks in each month’s issue.

Many of these companies also sponsor low-cost direct-purchase plans (DPPs) that allow you to buy stock—including your first share—directly from the issuer, bypassing brokers.

Remember, for safety, I suggest you invest no more than a small percentage of your wealth in any single stock. For best results, reinvest your dividends and make extra investments in all your portfolio stocks on a regular basis. The bigger the base, the faster your wealth will grow.

Q: What if I have up to $50,000 to invest?

A: Our Total Return Portfolio is designed so that we can all play on the same field as larger-scale investors. Wherever possible, I also try to include a representative ETF or other fund alternative for some of the same individual stocks, bonds and other investments in similar segments that I recommend.

If you’ve got less than $50,000 to deploy, you may find it convenient to plug in a couple of our ETF or fund alternatives in certain parts of your portfolio.

You can find some recommendations in the stock and bond allocations sections of the Total Return Portfolio. For example, utility stocks continue to provide good growth and income. But for a fund alternative, I recommend the Vanguard Utilities ETF (VPU) in the portfolio.

For investors who prefer funds over individual stocks, I’ve put together a collection of separate portfolios of funds and ETFs, each designed to mimic our main Total Return Portfolio. More on that below.

But even if you’re the sort of person who likes to mix and match funds and individual securities, I generally recommend that you start with mutual funds. Then add individual stocks and bonds only when you can afford to buy enough of each security without commission costs outweighing the opportunities.

Q: I see several other model portfolios besides the Total Return Portfolio. Which one should I follow, or should I invest in more than one?

A: Don’t be afraid to mix and match. The main Total Return Portfolio represents the core of my advice. But everyone’s needs and interests are different. If you prefer a mutual fund where I’ve recommended an individual stock or bond (or vice versa), follow your own inclination. It’s your money.

The important thing is that your overall portfolio be balanced (between stocks, fixed income and cash) and diversified (not too much in any single stock or industry). As long as you follow those basic rules, you can treat my various portfolios as providing a variety of well-researched stocks, bonds and funds.

For investors eager for regular income each and every month, year in and year out, I created the Incredible Dividend Machine Portfolio. This is set up to have stocks in three cycles of dividend payment distributions.

Cycle A has stocks paying every January, April, July and October. Cycle B has stocks paying every February, May, August and November. And Cycle C has stocks paying every March, June, September and December. And some of the stocks in each of the cycles also pay every month.

The idea is that you can select the seven in each cycle for a total of 21 stocks, which are all vetted to be conservative and reliable, while paying throughout each year. Or if you want to invest in fewer stocks, just pick a handful in each cycle, all of them are nearly equal in their quality.

Then I have the Niche Investments Portfolio. This is my farm team of stocks, bonds and funds. I place them here to test them out before adding them to the Total Return Portfolio or Incredible Dividend Machine. If they prove out, then they move up. If they don’t, they’re sold. Consider them as additional investments you can buy in smaller sums.

Then I have the collection of Model Mutual Fund Portfolios. I’ve tailored my various mutual fund portfolios to both mimic our Total Return Portfolio and meet your needs as closely as possible.

Our Fund Supermarket Portfolio is made up of funds you can purchase (generally without a transaction fee) through leading discount brokers like Schwab, Fidelity and TD Ameritrade.

If you’re the sort of investor who values the convenience of trading mutual funds through a brokerage account, yet you’re determined to keep fees and commissions to a minimum, this portfolio is you.

Some investors prefer to do all their business with one no-load (no sales charge) fund family. For these folks, I’ve created the All-in-the-Family Fund Portfolios. One portfolio draws exclusively from Fidelity funds; another from Vanguard funds; and a third from T. Rowe Price funds.

Then for the ease and efficiency of ETFs, I have the Hassle Free ETF Portfolio. The index funds that go into our ETF portfolio let you cut your investment expenses to the bone—a major advantage over traditional, actively managed mutual funds as noted above.

And along the idea of efficiency, I also have the Ten-Minute Retirement Portfolio. This, like the Hassle-Free ETF Portfolio, provides an easy way to invest in funds, including both ETFs and other funds with low costs.

In all our fund portfolios, I try to make changes as infrequently as possible. Fund investing should simplify your life, not clutter it.

Q: Everybody has lots of advice on what to buy, but I seldom see a sell signal. Will you tell me when to sell?

A: Definitely. I pride myself on not losing any of my recommendations down the “memory hole.”

I usually sell my recommendations as soon as I feel like the market is asking for full value for the stock. And if a recommended investment’s future performance is questionable, I’m not afraid to sell it, take a loss and move on to greener pastures.

Again, as noted above, I never hold and hope, and I review each and every recommendation and come up with a Buy or Sell. If I need a bit more time, a brief Hold recommendation is noted. A Hold will be resolved in short-order to be a Buy or Sell.

Every month, I update you on all our current portfolio holdings—Buy, Sell or Hold. And you can find my current advice on any portfolio investments featured in the newsletter in the Portfolios section of the Profitable Investing website. Here you can see all of our positions and how they are faring.

Q: What is Neil’s Journal, and how often do you update it?

A: Neil’s Journal is my online market commentary for subscribers only, posted to our website each Tuesday. It’s designed to give you my take on events that have occurred since the most recent issue.

If, say, an earnings announcement or some other news story moves a stock we own, I can immediately brief you on what’s happening via an entry in the Journal or in a special emailed alert.

When you open the Journal page on the website, you can scroll down through the latest month’s entries and easily access a full archive via the links provided. Thus, if you consult the Journal just once in a while, you’ll catch all my advice while it’s still fresh.

If you’re in a hurry, I try to keep them succinct. And every one of them comes with an Actions to Take section at the bottom for my latest advice on particular holdings.

In addition, at the top of our website, you will see the orange button for my free Dividend Digest e-letter. This is a weekly discussion of the markets and individual investments that is emailed each Thursday.

It is available for free for subscribers as well as non-subscribers and provides some additional commentary that I think you will find useful.

And of course, in the Reports section of the website are my latest and greatest special reports covering all sorts of investment topics, including taxes, which you should find useful. They are subscriber-exclusive and part of your subscription.

Don’t forget, I also host monthly webinars for Profitable Investing subscribers. To see the replays as well as to read the transcripts, check out the Live Events page of our site.

Thank you very much for subscribing. I will work hard to keep you as a subscriber. If you have a question, comment or suggestion, please reach out to me and my team at 800-211-8566 or send us an email at feedback@investorplace.com (be sure to include Profitable Investing or Neil George in the subject line).

Again, thank you for subscribing to and reading Profitable Investing.

All My Best,

Neil George

Neil George