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Investment strategies for beginners and professionals are pretty much the same in 2023.

This brief article covers the current ideas we imploy in range bound markets. We use diversification, defensive stocks and ETFs, bonds, and alternative investments that pay dividends like real estate investment trusts.

The stock markets are currently range bound, as the MarketSmith chart below illustrates.


Investment Strategies for Beginners

These are investment strategies that we use that are time tested and suitable for range bound or choppy markets:

1. Diversification: Investing in a diversified portfolio of assets can help reduce risk during volatile market conditions. This means spreading your investments across different asset classes, such as stocks, bonds, and commodities.

Our current investment choices include JEPQ, JEPI, and SPHD along with a mix of individual stocks.

2. Defensive stocks: Defensive stocks are companies that are less sensitive to economic cycles and tend to perform well during market downturns. Examples include healthcare, consumer staples, and utilities. 

 Our current choices here are mostly in healthcare (XLV) and consumer staples (XLP).

3. Bonds: Bonds are typically less volatile than stocks and can provide a steady income stream. Consider investing in high-quality bonds or bond funds to reduce risk.

Our choices here are the Barclays Aggregate Bond Fund (AGG), the 7-10 year Treasury Bond (IEF), and the 20 year Treasury Bond (TLT). 

4. Dollar-cost averaging: This strategy involves investing a fixed amount of money at regular intervals, regardless of market conditions. This can help smooth out the effects of market volatility over time.

Our current strategy for our family and kids investment accounts are primarily in SPHD. We are adding on dips.

These companies have paid consistent dividdends for over 25 or more years,

Dividends are “reinvested” into more shares on a monthly basis, as the asset provides 11.03% annual return since inception.

For example a $10,000 investment made in 2012 would be worth approximately $25,000 today.

SPHD is a benchmark for dividend investors with 51 stocks total with a dividend yield of 3.86%.

It has a Risk 3 consider medium and a expense ratio of 0.30% or $30/yr on $10,000.

Holdings last time we checked in early 2023 were PPL, EIX, ED, SD, ETR, D, NI, DUK, PNW, MO, PM, WBA, GIS, KHC, K, KMB, KO, CPB, CAG, PFE, ABBV, GILD, MRK, CAH, BMY, WMB, CVX, KMI, IRM, O, PEAK, EQR, T, VZ, OMC, IPG, IBM, HPE, JNPR, AVGO, AMCR, DOW, IP, PRU, TFC, HAS, NWL, and MMM among others.

5. Alternative investments: Alternative investments, such as crypto, real estate, private equity, and hedge funds, can provide diversification and potentially higher returns than traditional investments. However, they also come with higher risks and fees, so it’s important to do your research before investing.

These strategies present the investor with choices that may or may not fit your objectives, so please consult your investment advisor before putting money to work. Note: this article used chatGPT for some content.

Join us today in the trading room for our LIVE broadcast during market hours, as we navigate the current environment. Watch, listen, and trade from 9:20 AM to 4:15 PM Monday through Friday.

Happy Trading, 


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