The Gold Star Investment Strategy

Overview

The Gold Star Investment Strategy is a must read for every American who is interested in saving and investing for the future. Today, more than ever before saving and investing is such a necessity that cannot be ignored. The days of company pensions and social security providing financial security are just about gone. Too many Americans are living dangerously pay check to pay check and others are saving but receiving investment advice from incompetent sources. The Gold Star Investment Strategy is a great strategy ...
See more details below
Other sellers (Paperback)
  • All (5) from $14.85   
  • New (4) from $14.85   
  • Used (1) from $14.85   
Sending request ...

Overview

The Gold Star Investment Strategy is a must read for every American who is interested in saving and investing for the future. Today, more than ever before saving and investing is such a necessity that cannot be ignored. The days of company pensions and social security providing financial security are just about gone. Too many Americans are living dangerously pay check to pay check and others are saving but receiving investment advice from incompetent sources. The Gold Star Investment Strategy is a great strategy for saving and building wealth. Chapter I describes the strategy and shows how easy the strategy is to use. It also describes how truly diversified the strategy is and the necessity behind this diversification. I wrote this book because of my many, many, many years of studying economics and during that time have witnessed so many financial experts at the Federal Reserve, the Treasury, the colleges and universities, the investment community, the business community (including financial planners and investment advisors on TV and news media) giving such incompetent financial advice to the American public. My love of economic has produced a great strategy that is fool proof and easy to understand and use. The Gold Star Investment Strategy is unique in its diversification and ability to stand alone without the need for investment advice from other sources.
Read More Show Less

Product Details

  • ISBN-13: 9781449094508
  • Publisher: AuthorHouse
  • Publication date: 3/5/2010
  • Pages: 136
  • Product dimensions: 6.00 (w) x 9.00 (h) x 0.32 (d)

Meet the Author

John Shannon

John Shannon is one of America's leading writers of neo-noir. His Jack Liffey series of novels is one of the most critically praised mystery series in the genre. The Devils of Bakersfield is the tenth book in the series. Shannon lives in Los Angeles.

Read More Show Less

Read an Excerpt

THE GOLD STAR INVESTMENT STRATEGY


By JOHN SHANNON

AuthorHouse

Copyright © 2010 John Shannon
All right reserved.

ISBN: 978-1-4490-9450-8


Chapter One

THE GOLD STAR INVESTMENT STRATEGY

The Gold Star Investment Strategy is a totally diversified investment strategy. The Gold Star Investment Strategy is a strategy designed to take advantage of only the most important five investments. The Gold Star Investment Strategy automatically adjusts to buy low and sell high because of its percentage limits chosen in each of the five investment categories: cash, gold, real estate, stocks, and energy. These five categories were chosen because they are a must have investment in every portfolio. An omission of any one of these five categories is a breach of true diversification. The Gold Star Investment Strategy is a fool proof strategy for every investor; beginner, with absolutely no investment or economic background to a seasoned investor or financial planner and everyone in between. With the Gold Star Investment Strategy, an investor does not need the services of a financial planner, investment advisor or professional, nor does the investor need to stay glued to the computer, TV or financial newspapers. By periodically adjusting the investments whenever an investment has materially increased in value, every 6 months or once a year, the investor would be selling some of a particular investment that has reached the upper limit of the agreed upon percentage, thereby selling high. Any new money entering the portfolio would be used to purchase the investment that has reached the lower limit of the agreed upon percentage, thereby buying low. The choice is between the Gold Star Investment Strategy that will build tremendous wealth without any effort and cost or costly financial advice from questionable experts and many hours of TV, computers and newspapers which deliver questionable advice. Also, we all see the real estate professionals that say "put all your money in real estate, it does not fall in value". We all see the stock market experts that say "put all your money in stocks, in the long run the stock market will return 10% a year" Their claim that diversification is a small cap, large cap and an international mutual fund is preposterous. We all see the "Gold Bugs" that advocate put all your money in gold even during the 20 year bear market in gold from 1980 to 2000. The truth of the matter is most experts are not experts at all. I have found in my 35 years of studying economics and following the financial markets that most experts have very little knowledge of economics despite their degrees, and the average person has obviously less. That is the reason we are in such a "age of turbulence". Most investors , by listening to the experts buy stocks at the top of markets as in 1999, buy or refinance real estate at the top as in 2005 or buy gold at the top of the market as in 1979. Tops of the markets are tops because everyone is entering the market pushing up prices. The Gold Star Investment Strategy would have the investor selling during those tops because the investments would be reaching the upper limits of the agreed upon percentage for that investment. Likewise when an investment is low and a time to buy, the lower limits will be breached thereby signaling a time to buy and add funds to that particular investment,

The general theory of the Gold Star Investment Strategy is to take all invest able funds in the portfolio and to assign a percentage to each of the five investments to total 100%. The percent that one assigns to each investment should be personal, according to preference and age but it should be within the limits I recommend. Each of the five investments has its own chapter to determine the makeup of that investment to be used for purposes of safety and capital appreciation. Next, periodically checking and adjusting the portfolio if there is a materially significant increase in any of the components of the portfolio to take some profits off the table and putting it to the cash account. The purpose of the Gold Star Investment Strategy is to invest in four sectors of importance to build up a growing cash account. If a component materially falls below the percentage chosen, funds from the cash account should be used to bring the percentage back in line. Caution: this should be done with 1/2 the yearly interest only from the cash account not principal. This is very important! New money added to the portfolio should be added to each investment at the chosen percentages.

Let us choose a hypothetical portfolio with a choice of percentages from the chart above that add to 100%. For example, 50% cash, 20% gold, 10% real estate, 10% stock, 10% energy. We have chosen these percentages from the chart above, but there are a number of points to remember with the Gold Star Investment Strategy:

1. Cash is King 2. Gold protects Cash 3. Profits from one component moves to cash only 4. A falling component breaching lower limits of the percentage should only be replenished with up 1/2 of the yearly interest on the cash account or new money pro-rated. 5. New funds added to the portfolio should be apportioned in the percentages chosen or directly to the cash account. 6. Each year cash will increase from three sources: a. Profits from other components b. 1/2 or more yearly interest on cash c. New money entering the portfolio in the percentage chosen 7. Choose the percentages for each component within my recommendations and stay with that chosen percentage, choose safe investments. 8. Invest in each of the 5 components according to the recommended vehicles for safety and capital appreciation. 9. Only up to 1/2 of the yearly interest on the cash account can be used to replenish lower components or for needed withdrawals. 10. Work for money then have money work for you. Stated otherwise, invest in 4 components to build a growing cash account.

Let us look at each of these points.

#1 Cash is King An investor must look at the Gold Star Investment Strategy as a strategy to invest in the four major investments sectors of the U.S. economy in order to build a vastly growing cash account. Choose a vehicle in the cash account that is chosen for safety, interest bearing ability, and short term not subject to declining values when interest rates rise. For these reasons cash is the king of the Gold Star Investment Strategy. And short term treasuries are the vehicle to invest in for that purpose. #2 Gold Protects Cash If "Cash is King", Gold is the Queen of the Gold Star Investment Strategy. There is no investment that is 100% safe, only the totality of the Gold Star Investment Strategy. Let us look at cash alone. One of the safest cash investments would be a government treasury money market account, a savings bank account, bank CD or other similar so called safe investments. Yes, these investments are 100% backed by the U.S. Government's ability to print money and return to you the amount of your original investment. But as we have seen in 2007, 2008 and 2009, the financial and monetary section of the U.S. economy and global economy is in a precarious situation. Only someone sleeping under a log or hiding in a hobbit's hole is not aware of the financial stresses and inflation potential that exists. If inflation is higher than interest rates or the dollar is falling at a percentage that is higher than interest rates on your cash account you would be losing purchasing power. If this happens gold would rise far faster than the corresponding drop in value of cash. In fact, gold would increase at a greater and greater percentage than the purchasing power of cash would be falling. Hence gold protects cash. #3 "Profits from one component moves to cash only" Periodically every six months, once a year, or when the headlines on TV and the newspapers mention some investment that is making new highs is the time to move profits from a component in the strategy that has materially broken the upper percentage limits and take the profits to return the percentage to its original number. Always put this profit in the cash account. And remember the louder the shouting on TV and the newspapers on how great an investment is and breaking new records is guaranteed to continue, the more sure you should be to take the money of the table in that area. #4 "A fallen component breaching lower limits of the percentage should only be replenished with up to 1/2 of the yearly interest of the cash account or new investment prorated money". If an investment starts to decline in value and it materially breaches the lower limit of the percentage, periodically every six months, yearly, or when the TV and newspapers bellow how bad investing in a particular investment is, this is the time to try to return the percentage to its original number. By using up to 1/2 of the yearly interest in the cash account or new investment funds coming into the portfolio prorated at the agreed upon percentages. Remember the cash account should increase yearly by 1/2 or more of its interest plus profits from other components and any new money. Only 1/2 or less of yearly interest should be used for replenishing components and needed withdrawals. #5 "New funds added to the portfolio should be apportioned in the percentage chosen or directly to the cash account". Preferably new funds should be added proportionally. 50% added to cash, 20% added to gold, 10% added to stocks, 10% to energy, 10% added to real estate. Adding new funds only to the cash account will put the percentages out of line. This method should only be used if the amount is not enough to materially affect the percentages, or the investor is in a higher age bracket. All 4 other components have risen in value and the cash percentage is a lower percentage than the agreed upon rate. In this instance I would still prorate the incoming funds after I took profits from all four components. With regard to age brackets in a later chapter, I discuss the Gold Star Investment Strategy for a young investor and the differences for an elderly investor. #6 "Each year cash will increase from three sources: a) profits from other components, b) 1/2 or more yearly interest on cash c) new money entering the portfolio in the percentage chosen". Although this is self explanatory, I will still elaborate slightly. In the Gold Star Investment Strategy, the object of the game is to have a growing portfolio every year at the maximum rate that can be achieved safely and without effort. Part of this strategy is the cash account will grow each and every year by moving profits in to cash and getting a yearly return of interest on the cash account. That is the reason no more than 1/2 of the yearly interest on cash should be used for any reason. Needed withdrawals and replenishing declining investments should never total more than 1/2 of the yearly interest from the cash account.

#7 "Choose the percentage for each component within my recommendations and stay with that chosen percentage". I did not dictate a definite percentage to use in the strategy instead I chose a range in each investment component for an investor to choose according to age and personal preference. One investor may be more bullish on the stock market and choose the upper limits of the stock component and the lower limit of the real estate sector. Another investor may want the upper limits of the energy sector and a lower limit to the gold sector. Another older investor may want a higher limit on the cash account say 60% and the lowest limits on all the other components. Each investor should design the percentages to their own personal needs and preferences as long as the percentages add to 100% and the choices are adhered to. #8 "Invest in each of the five components according to the recommended vehicles for safety and capital appreciation". In the Gold Star Investment Strategy I devote a chapter for each one of the 5 components of the strategy explaining why each component was chosen and the appropriate vehicle and the reasoning behind the choice. In some I recommend only one choice in others I ask the investor to choose between numbers of acceptable choices. This point is important because of the nature of the strategy to average down the costs of the investment to a point when the investment starts to rise in value profits will be greatly realized. If the investor chooses his own vehicles for a component lets say a particular stock for the stock portion of the strategy and the investor is adding to the position as the stock is falling this would prove to be disastrous if the company went out of business and the stock became worthless. Some other examples would be a particular energy stock for the energy component let us say Enron for example or a real estate investment trust that invested in mortgages. That is why for the Gold Star Investment Strategy we only choose high grade vehicles for each component that an investor can comfortably average down if necessary without worry that the investment will become worthless. Stay in the recommended vehicles.

#9 "only up to 1/2 of the yearly interest on the cash account can be used to replenish lower components or for the needed withdrawals". Self-explanatory. #10 "work for money then have your money work for you". Stated otherwise invest in four components to build a growing cash account that can support your standard of living.

The Gold Star Investment Strategy allows an investor to save and invest in the four most important and major areas of the economy by utilizing safety and diversification to build a cash account to allow the investor to have his cash account work for him or her.

Choose safe investments for each component. Even if this has been pointed out already its importance cannot be underestimated. Many investors place their funds in some very safe investment only to find little returns that probably do not keep up with the government underestimated inflation rate. Safe investments usually have a low return, but the theory behind the Gold Star Investment Strategy which covers five investment areas which will always have one, two, three, and sometimes four sectors rising at any one time, takes advantage of every concept in investing including volatility, dollar cost averaging, selling high-buying low, diversification, liquidity, etc. all while investing in very safe investments.

In this chapter, I will try to answer three questions. What is the Gold Star Investment Strategy? How does it work? And why is the strategy necessary?

I think I have answered the first two questions even though in later chapters more detailed info will be provided. But the third question "Why is the strategy necessary?" is the most important.

The Gold Star Investment Strategy is necessary for many reasons.

Reason #1: the average investor is, as I pointed out earlier, getting bombarded with questionable advice from the so called experts. I have found the anchors on Bloomberg News, Matt Miller and Kathleen Hayes etc have a greater knowledge of economics than the so called experts from the Federal Reserve, Goldman Sachs etc. that they are interviewing. In other words, there are just as many experts predicting investments will go up as there are that it will go down. In each investment area there are a lot of incompetent people giving incompetent advice.

Reason #2: Tops of the market are tops because everyone is getting in at that time. But that is the time to be selling. The Gold Star Investment Strategy would insure that would happen. While everyone else is buying at the top of the market due to TV coverage of the experts advocating a particular investment that is going to continue climbing and the frenzied atmosphere a top produces. Everyone gets in except the investor that adheres to the Gold Star Investment Strategy. He or she would be doing the selling.

Reason #3: Bottoms of markets are bottoms because everyone is out of the market and the advice of TV, news papers etc and experts to the general public is how bad things are in that investment area. That is precisely when the strategy would be nibbling for the choice bottom fish.

(Continues...)



Excerpted from THE GOLD STAR INVESTMENT STRATEGY by JOHN SHANNON Copyright © 2010 by John Shannon. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Read More Show Less

Table of Contents

Contents

Introduction....................vii
Authors Note....................ix
Dedication....................xi
Disclaimer....................xiii
Prologue....................xv
Chapter I The Gold Star Investment Strategy....................1
Chapter II Cash....................11
Chapter III Gold....................15
Chapter IV Stocks....................21
Chapter V Real Estate....................27
Chapter VI Energy....................33
Chapter VII Second and Third Tier Investments....................37
Chapter VIII Outlook for the U.S. Economy....................43
Chapter IX The Four Horsemen....................55
Chapter X Main Reasons for the U.S. Decline....................63
Chapter XI Steps for U.S. Improvement....................77
Postscripts....................83
About the Author....................117
Read More Show Less

Customer Reviews

Be the first to write a review
( 0 )
Rating Distribution

5 Star

(0)

4 Star

(0)

3 Star

(0)

2 Star

(0)

1 Star

(0)

Your Rating:

Your Name: Create a Pen Name or

Barnes & Noble.com Review Rules

Our reader reviews allow you to share your comments on titles you liked, or didn't, with others. By submitting an online review, you are representing to Barnes & Noble.com that all information contained in your review is original and accurate in all respects, and that the submission of such content by you and the posting of such content by Barnes & Noble.com does not and will not violate the rights of any third party. Please follow the rules below to help ensure that your review can be posted.

Reviews by Our Customers Under the Age of 13

We highly value and respect everyone's opinion concerning the titles we offer. However, we cannot allow persons under the age of 13 to have accounts at BN.com or to post customer reviews. Please see our Terms of Use for more details.

What to exclude from your review:

Please do not write about reviews, commentary, or information posted on the product page. If you see any errors in the information on the product page, please send us an email.

Reviews should not contain any of the following:

  • - HTML tags, profanity, obscenities, vulgarities, or comments that defame anyone
  • - Time-sensitive information such as tour dates, signings, lectures, etc.
  • - Single-word reviews. Other people will read your review to discover why you liked or didn't like the title. Be descriptive.
  • - Comments focusing on the author or that may ruin the ending for others
  • - Phone numbers, addresses, URLs
  • - Pricing and availability information or alternative ordering information
  • - Advertisements or commercial solicitation

Reminder:

  • - By submitting a review, you grant to Barnes & Noble.com and its sublicensees the royalty-free, perpetual, irrevocable right and license to use the review in accordance with the Barnes & Noble.com Terms of Use.
  • - Barnes & Noble.com reserves the right not to post any review -- particularly those that do not follow the terms and conditions of these Rules. Barnes & Noble.com also reserves the right to remove any review at any time without notice.
  • - See Terms of Use for other conditions and disclaimers.
Search for Products You'd Like to Recommend

Recommend other products that relate to your review. Just search for them below and share!

Create a Pen Name

Your Pen Name is your unique identity on BN.com. It will appear on the reviews you write and other website activities. Your Pen Name cannot be edited, changed or deleted once submitted.

 
Your Pen Name can be any combination of alphanumeric characters (plus - and _), and must be at least two characters long.

Continue Anonymously

    If you find inappropriate content, please report it to Barnes & Noble
    Why is this product inappropriate?
    Comments (optional)