When it comes to making money in the markets, it's not where you are, but rather it's where you end up.
Even if you start your investing career with very little, you can still slowly build a substantial nest egg - if you have the discipline to stick with a plan.
That's what value investing is all about. You're not going to gamble on risky "alternative assets." And you're not going to chase each hot sector as it reaches unsustainable valuations.
You cannot get rich following the talking heads on TV. Why? Because when pundits "reveal" their picks, most of the time most of the good news - and most of the gains - are already out.
Slow and steady wins the race. And once you reach your goals, slow and steady will keep those gains in your pocket.
Get rich, stay rich.
"Federal Rent Checks": Thanks to an obscure law, over 100 government agencies are required to pay rent. By following a simple investment strategy, you could receive checks of up to $1,795 every month. Read more...
That is why Money Morning Special Situation Strategist Tim Melvin believes so strongly in value investing. He calls it a new mindset for investors, especially for those who just lived through what is now the longest bull market on record, buying every hot tip and taking big risks.
And once you've had some success building your wealth, you can forget about beating the indexes.
"You need to preserve what you have and increase it just fast enough to overcome those two scourges of wealth - inflation and the tax man," Melvin says.
Here's Melvin's plan in a nutshell for those ready to move into wealth preservation mode: closed-end mutual funds with a distribution rate of 5% or higher and trading at a 10% or greater discount to net asset value (NAV).
Put 3% of your capital in the 33 funds that have the highest discount to NAV, and then rebalance every year according to the same criteria.
Here are some of Melvin's favorite funds...
Here's How to Get Rich and Stay Rich Through Value Investing
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Although you will spread your money out over many funds, Melvin does have a few favorites. The first is CBRE Clarion Global Real Estate Income Fund (NYSE: IGR), which owns real estate investment trusts (REITs) and real estate securities around the world. And its management team has extensive experience in real estate investment and management.
This fund trades close to a 12% discount to its NAV. That means for every $88 invested, you own $100 worth of underlying assets. It's like buying real estate stocks on sale. Toss in a 7.9% dividend yield, and this fund looks even more attractive.
The second fund is Macquarie Global Infrastructure Total Return Fund (NYSE: MGU), which invests in infrastructure companies and projects around the world. They include airports, railroads, water systems, electrical grids, toll roads, and other absolutely critical infrastructure worldwide.
Infrastructure is not really subject to the whims of a Silicon Valley CEO or a Wall Street analyst's latest pontification. It is a necessary part of the world economy that affects billions of people every day.
For investors, it offers a 14% discount to NAV and a beefy 5.7% dividend yield. You get paid to wait for the market to realize how undervalued this fund really is.
With these funds, you not only diversify by sector and management but also by asset type. They own REITs, infrastructure, short-term bonds, preferred stocks, and blue-chip stocks. You get regular dividend payouts, and you don't have to worry about a trendy stock dropping multiple percentage points overnight. We're looking at you, Tesla Inc. (Nasdaq: TSLA).
Not only that, you will own these funds at steep discounts to their value, giving you plenty of cushion to ride out any bumps in the road.
These are just the beginning. Melvin identified many others, so stay tuned.
Millions of Americans Now Entitled to Collect "Federal Rent Checks"
Forty-six years ago, Congress passed an obscure piece of legislation known as Public Law 92-313. And today, it's why the Treasury is sitting on top of an $11.1 billion pile of money.
Fortunately, Americans from coast to coast have discovered a loophole that entitles them to a sizable portion of this cash.
And they're racing to add their names to a special distribution list.
Some are now receiving monthly checks worth $1,795 each. Others are collecting $3,000, $5,000, or more every month. If you want to join them in this powerful investment income stream, you better hurry up.
Because this cash is getting scooped up left and right! Read more...