The quarter is ending today, so let's return to basics. In this environment, we want to be cautious and structure our portfolios in a safe manner. We want strong profit potential in the face of future volatility.
We want to focus explicitly on an allocation model that gives you the most success as an investor. And what better way than to return to the 50-40-10 portfolio that's been a cornerstone? As we build Republic Research (a new chapter in my career), our focus must center around real growth, real cash flow, and solid valuations that can deliver tremendous upside.
Let's discuss the allocation model of our own unique flavor of "sovereign wealth fund."
The Florida Republic's Sovereign Allocation Model
In the Florida Republic, we manage our money a bit differently.
We focus on big trends and big opportunities. But we need to be smart about this. We can't just allocate half of our portfolio to crazy AI stocks, cryptocurrencies, or equities trading at insane price-to-sales multiples.
We need to prioritize target growth, strong management, and value where it exists. And we must structure our investments based on the risk-reward of each name.
In our allocation model, we divide our investments into three buckets.
Republic Refuge Assets: The first bucket consists of stocks that provide strong dividends and income. These are safe, secure investments that will kick off cash, pay reliable dividends and are run by strong management teams. This is the foundation of the Republic Portfolio. It provides balance and stability through uncertain periods of volatility or even in bear markets. This part of the portfolio would also include mature gold and silver producers, access to developed economies, and even a hedge against the broader portfolio should momentum turn negative for short durations.
Republic Fortified Assets: This bucket consists of 40% of your allocation. These stocks have strong growth and income potential. But we want to go a step further. I want to see VERY strong cash flow, names with a strong Piotrowski F score of 7 or higher, and Graham value numbers under 0.5. If I launched a portfolio tomorrow, it would consist of many energy and commodity names and stocks that operate in businesses that aren't going away anytime soon. Think U.S. defense contractors, agricultural commodity players, and midstream energy companies.
Republic Risk Assets: The final 10% is where we take our risks. It might be on a hot AI company, an IPO, or a tech spinoff. This will also include turnaround stocks that are improving their F score, but they need to clean up their balance sheets. These trades might be in alternative energy, a new battery technology, or a rare commodity that isn't widely traded but has a massive demand for our future: Think helium, lithium, or graphite.
This is the foundational approach of the Florida Republic - our sovereign wealth fund.
With this structure in place, we've positioned you to get the most out of the billions of dollars flowing into global markets.
A solid portfolio structure defends your money against the downside...
And it gives you the massive upside that can help you sleep better at night and plan an early retirement.
To your wealth,
Garrett Baldwin Florida Republic Capital (Available on Substack)
