Word is out. Mr. Trump has sold his stocks.
If the news is right – and it may actually be this time – the billionaire has dumped all his shares of public companies.
“We are in a big, fat, ugly bubble,” he said.
“The only thing that looks good is the stock market,” he continued during a debate in September. “But if you raise interest rates even a little bit, that’s going to come crashing down.”
[ad#Google Adsense 336×280-IA]Normally, this is where I’d dig deeply into the nuances of interest rates – the hormones of the economy.
But the truth is the real estate mogul is wrong. Rates will rise this week, and the bears won’t mount a surprise attack.
A single rate hike is a nonstory. Sorry.
Yet I sit here cringing, knowing that devoted market timers across the world are hitting the “sell” button based on Trump’s words and now his actions.
It’s a dumb move.
Here’s the deal: If Trump were selling his massive real estate holdings, I’d be worried. That’s the crux of his wealth… the foundation of his empire.
It’s what he knows best.
But he’s sold only his stocks, reportedly just $10 million to $20 million worth of his billion-dollar-plus net worth.
Again, it’s not worth a sneeze. That’s because – if you haven’t noticed – Trump isn’t the typical investor. He’s made his fortune actively investing in real estate and the businesses that encompass those endeavors.
He’s not liquidating a 401(k) or his hard-earned IRA. No, Trump has essentially sold his fun money.
He could have done it for many reasons. He could be making a point… ridding himself of conflict… or paying off some hearty campaign bills.
Whether he’s selling because of fears of a bubble is irrelevant. It’s certainly not a move the average investor should make.
There’s a much smarter way to make money in stocks.
If you don’t know it, The Oxford Club (the publisher of Investment U) has a unique investment philosophy.
It’s called The Oxford Wealth Pyramid. And we think Mr. Trump may be a fan… despite his big bold move recently.
You see, the Pyramid has proven to reduce risk and increase reward by first building a core portfolio and then adding varying investment strategies on top.
And while Trump doesn’t use a well-allocated stock portfolio as his core portfolio (as we advocate), there’s no doubt he’s built his empire on a diversified set of income-generating assets. And from there, just as our plan dictates, he’s added an array of strategies.
If you’re willing to make investing your full-time job, you can follow the real estate strategy Trump used to build great wealth. You’ll likely do well.
But if you don’t have the time, skills or desire to run an empire, stocks are by far your best bet. By owning an equity stake in a company, you’re relying on folks who do have the time, skill and desire to run something great.
For a few bucks a share, you’re reaping the reward of their hard work.
Again, stocks are merely another layer of strategy diversification for Trump. His business ventures are his primary assets. But he’s an exception to the rule.
He admits he’s never been a big stock investor. And, bluntly, it shows. Markets have reached all-time highs since he sold – potentially costing the president-elect millions in gains.
Bottom line… Don’t follow stock advice from a real estate mogul. Stick to a proven, time-tested system. Build your wealth on a solid bed of well-diversified stocks.
And don’t sell on a hunch. It will cost you.
Good investing,
Andrew
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Source: Investment U