When I used to work on the trading floor, I once heard one broker say to another, "The only people dumber than you are your clients."
If that makes you angry, it absolutely should. But that's really what's going on behind the scenes: The big money on Wall Street wants you to think you're clueless without their help.
But these guys' clients weren't dumb... They were just being kept in the dark.
While these brokers were telling their clients to "diversify" and put their money into "safe exchange-traded funds" (ETFs) like the SPDR S&P 500 ETF (NYSEArca: SPY), they were dropping the firm's cash - the money their clients were paying - into a secret "money pool," a fund that virtually no one off Wall Street knows about...
The Street has used this to maintain a high double-digit advantage over retail investors. Now I'm going to blow the lid off and name the ticker so you can have access yourself...
Most "Diversified" Portfolios Aren't
When traders trade with the house money, it's called proprietary trading - "prop trading," for those in the know. It's an absolute gold mine; it's outperformed the SPY by 35% since 2003.
But the brokerages didn't tell their clients about this cash cow. Instead, they told them to "diversify" between large-caps and tech, splitting their hard-earned money between the SPY, which tracks the S&P 500, and the Invesco QQQ Trust (NASDAQ: QQQ), which tracks the tech-heavy NASDAQ.
There's a big problem - aside from the fact that these ETFs' returns pale in comparison to what brokers were getting from their secret stash.
They're not actually diverse.
SPY and QQQ are in fact driven by the exact same six companies: Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT), Amazon.com Inc. (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOG), Tesla Inc. (NASDAQ: TSLA), and Facebook Inc. (NASDAQ: FB).
Even people who've never bought a stock in their lives are familiar with these names; they make up over 24% of the SPY and 44.3% of the QQQ.
So when these guys told their clients that they had them "diversified" between tech and large cap, the truth is that they owned both, and they were not diversified at all.
So whenever the FAANGs took a fall, their clients watched all of their hard-earned cash go down the drain.
Clearly, investing with the methods that Wall Street recommends will get you nowhere.
You'll never be truly diversified.
You'll never retire comfortably.
You'll never get rich.
Instead, you need to invest with the methods that Wall Street is using themselves, behind the scenes. And I'm done keeping secrets. The money pool I mentioned - and that I'm going to tell you about right now - has been used exclusively by the super-rich since it started trading on the market almost two decades ago.
But not anymore. It's time for you to take your share and dive in.
Tap Wall Street's "Secret Stash" Yourself
I'm talking about the Invesco S&P 500 Equal Weight ETF (NYSEArca: RSP).
Yes, the RSP holds the stocks in the S&P 500 index. Sounds like the SPY, right? It's not; there's a huge, high-profit difference.
See, unlike the S&P 500 and, by extension, SPY, the RSP ETF rebalances every quarter.
Through much of 2020, the ETF trailed the SPY. But in December 2020, RSP managers were selling the Technology Select Sector SPDR Fund (NYSEArca: XLK) at new highs and buying the Energy Select Sector SPDR Fund (NYSEArca: XLE) - setting its place as an asset that's going to clean up in 2021.
RSP is around 64% cheaper than SPY right now, but get this - it's outperformed SPY by more than 30% this year. You read that correctly: more than 30% better performance for less than half the cost.
Here's the chart - no fancy software, you can get one yourself from Yahoo Finance.
*chart taken from Yahoo!Finance
Think about it - as tech was topping out, RSP was buying energy and selling tech, which SPY couldn't do. And now, in 2021, we're watching shares like AAPL and FB become safe havens while names like Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) have posted incredible gains up to 34% and 21% year to date, respectively.
That's true diversification - taking the best of both sectors.
The hell of it is, while I was working on Wall Street, RSP is one of the moneymakers that I wasn't allowed to reveal to clients, especially not clients with smaller accounts.
But now, with retail trades making up at least 30% of the market, regular investors have proven their power.
So far in 2021, we've seen more than 14.7 billion trades per day. And for the first time, trades made by me and you are making up a huge chunk of that number - a big enough chunk to move the market, to move the RSP, on our own.
See, together, as individual investors, we can shoot this thing to the sky. It's already outperforming the S&P 500 - but that's nothing compared to what we could do with it.
Brokers on Wall Street are scared... as they should be.
The RSP is one of the keys to true financial power, and that's exactly why I'm putting it in your hands.
But, amazing as it is, RSP's not the only key - not even close. As you may have guessed by now, there's a lot Wall Street's been keeping for itself - keeping from you.
I said earlier that I mean to blow the lid off, and I meant it – I’m out to help regular investors flex and develop their moneymaking muscle and take Wall Street to the mat. You can’t say they don’t have it coming to ‘em.
That’s why I really hope I can count you in as one of the very first subscribers to my Profit Takeover e-letter. It launches Tuesday, April 27, and should start hitting inboxes at 4 p.m. Eastern. In keeping with my mission, Profit Takeover is absolutely free; it won’t cost you a dime, and it never will. You’ll hear from me every week with new investing tricks and tools - and, yes, we’ll be talking stock tickers, too.
There's never been a better time to be a small investor - I want to make sure you can make the most of it.
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