No trading system in the world can guarantee 100% winners...
(If anyone promises you that they can, run!)
But you can keep the inevitable losing trades from wrecking your portfolio with two simple (and easy) methods: using stop losses and following proper position-sizing advice.
In my Retirement Millionaire advisory, we regularly recommend you use stops of 20%-25%.
Similarly, we "position size" by recommending that you never put more than 4%-5% of your portfolio in any one investment recommendation (like a single stock or bond).
The combined strategies of trailing stops and smart position sizing ensure you never lose more than about 1% of your portfolio on any one investment... Whether you use a 5% position-size limit with a 20% stop or a 4% size limit with a 25% stop, both work out to be about 1% of your portfolio at risk.
Many brokers offer a similar service that tracks your stop losses... But whatever you do, DON'T enter an actual "stop-loss order" with your broker. It's like playing poker and telling everyone your hand. The effect is probably minimal at the size most of us transact, but I still avoid it.
Instead, I recommend watching your stops manually – outside of your broker account. You can use a sheet of paper, an Excel spreadsheet, or if you want the easiest option of all – you could try a risk-free, 60-day trial to TradeStops.
It allows you to instantly import your own portfolio data from a dozen different brokerage firms... along with portfolios from dozens of different newsletters. Plus a whole lot more...
TradeStops founder Dr. Richard Smith recently shared something with Porter Stansberry and Steve Sjuggerud that is absolutely shocking. He showed how you can take the research you're already following... protect your portfolio from big losses... and even make far bigger gains. Click here to view a recap of the recent training session.
Q: I was surprised to learn your opinion about fish oil which got me to wondering what supplements or vitamins do you take or advise health-conscious individuals to take? – G.P.
A: Supplements as a whole are unregulated and can be dangerous. But not all of them are without benefit...
While I think taking regular, large doses of vitamin D is dangerous... you may benefit from occasional, small doses if you live in low-sunlight areas during the winter. I love vitamin C and zinc for cold prevention. It might surprise you to learn I also take a multivitamin once a week.
Q: How come no one with your group ever speaks of or tells anyone how... when ... where basic amounts of funds needed to get started to follow along with your recommendations. I have been following your videos for years and enjoy listening to you explain things... Nothing on how to get or the minimum amounts of money. – M.G.
A: The way to get the money to start investing is saving... and starting small.
My longtime assistant Laura first got started investing more than 10 years ago... She took $25 per paycheck and put it toward buying shares of a mutual fund – an investment that offers instant diversification and asset allocation.
If your employer matches it, always contribute to your 401(k).
Never underestimate the power of a 401(k) account. A 401(k) is a retirement account that your employer sponsors and manages.
Our employer matches half of an employee's contributions up to 6% of salary. That means if the employee sets aside 6%, the employer adds 3%... for a total of 9%. That's an instant 50% return on your money.
My team is working on a report that explains how new investors can get started – whether you're a 20-something just starting out, or in your 50s and finally taking the time to take your retirement into your own hands.
Q: Doc, you talk about blueberries a lot, but do you have an opinion on acai? – D. Garon
Doc Eifrig comment: I love blueberries. They may be the best food there is for good health. Studies of the popular acai berry show it to be only moderate in its antioxidant properties. Blueberries and dark grapes have much more and are my preferred choice for health.
However, açai does have mild effects on the inflammation pathways – similar to aspirin in its mechanism of action. I like to try different fruits, and I certainly won't turn down açai drinks or potions. But I'd rather have blueberries, chocolate, and red wine for my dessert.
- The incredible benefits of my five favorite berries.
- Something different: It's National Doughnut Day... Here's where you can treat yourself to a free pastry.
Have you ever traveled to another country for health care? Share your story with us at [email protected].
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Retirement Millionaire Daily Research Team
Buffalo, New York
June 2, 2017