Grow Your Portfolio the Intelligent Way

Blinded By The Light

By Jim Woods
  • Blinded By The Light
  • ETF Talk: Turning a Liability Into an Asset
  • Putting One Fake Foot in Front of the Other
  • Introducing My Secret Market Insider
  • Fight For Your Right To Party

***********************************************************

Blinded By The Light

He was just blinded by the light

Cut loose like a deuce another runner in the night

Blinded by the light

Mama always told me not to look into the sights of the sun

Whoa, but mama, that’s where the fun is…

–Bruce Springsteen, “Blinded By The Light”

You might find this hard to believe, but Bruce Springsteen never had a number one record. Well, sort of. You see, Bruce’s childhood memoir masterpiece, “Blinded By The Light,” did reach number one on the charts, but not in its original form (find out the real story behind the song and its unconventional lyrics straight from Bruce).

The song actually first appeared on Springsteen’s 1973 debut album, “Greetings from Asbury Park, N.J.” Yet, it was the 1976 cover version of the song by British rock band Manfred Mann’s Earth Band that reached number one on the Billboard Hot 100 in the United States in February 1977.

So, why I am bringing up rock history here this week in The Deep Woods?

Well, aside from the fact that the subject is fun to discuss, the meaning of the song, and its history on the Billboard charts, can teach us some important lessons about the markets, investing and life.

First, when Bruce wrote his story about being “blinded by the light” of the new and the unknown, and wanting to, as he puts it, “do things I hadn’t done and see things I hadn’t seen,” he didn’t envision the song being covered by a band across the pond. He also didn’t think that song would become a number one hit.

Yet, that’s the thing about life, most of the time we don’t know where our choices will lead us. Even seemingly pedestrian choices can have giant ramifications for our lives, and we never really know which of those everyday decisions will end up morphing into life-changing circumstances. So, the lesson here is to always choose wisely no matter how seemingly insignificant your decision may be, as you never know the causal significance it could have.

Second, when Bruce wrote about his desire to do things he hadn’t done, see things he hadn’t seen, and allow himself to look into the sights of the sun (because that’s where the fun is), I doubt he realized that this would be a profound lesson for investors. Let me explain.

You see, in February and March of 2020, many investors were “blinded by the light,” and not in a positive way. In fact, many were blinded by the market turmoil occurring during the beginning of the pandemic, and many pulled their money out of the market and went to cash. Now, this was a smart move for several months; however, the pernicious, COVID-19-inspired selling in markets blinded many an investor into staying on the sidelines well into the big rally and economic rebound that’s still going strong today.

So, the lesson here for investors is to not allow yourself to be blinded by the often-intense light of fear in markets.

Indeed, one of the biggest problems I encounter when talking to investors is not that they are too aggressive with their money, but that they aren’t even in the market because they want to avoid experiencing another Q1, 2020 sell-off. Some investors are even still on the sidelines as a result of fear of another 2008-2009 financial crisis.

In this case, you don’t want to be blinded by the light of fear. Instead, you want to move toward the light of future possibilities, and you want to put your money to work in the investment vehicles best suited to serve your particular circumstances and goals.

So, if you are still leery about getting in this market, I implore you to shed that fear of a tired bull. Allow yourself to look into the sights of the sun and the brightness of opportunity and embrace the potential upside — because as Bruce told us, “that’s where the fun is.”

If you would like to find out how you can stare into the sights of the sun and embrace opportunity, I invite you to check out the full palette of offerings that is my newsletter advisory services.

***************************************************************

ETF Talk: Turning a Liability Into an Asset

Inflation is all over the news these days, and everyone is suggesting ways to avoid its impact on you and your assets.

Some market experts are suggesting that Bitcoin and other cryptocurrencies are the way to go, while others have made tried-and-true gold, silver and precious metals stocks their hedges against the effects of inflation.

After all, inflation erodes your purchasing power by requiring you to spend more of your hard-earned money to buy the things that you need and want. Inflation also reduces the desire for both the public and corporations to invest in the inputs that make the economy hum along. Plus, inflation lowers the value of pensions, savings and Treasury notes, potentially leaving retirees out in the cold financially.

However, what if I told you that there was a way to turn the corrosive effects of inflation into a force that helps, rather than hurts? One potential way to do so is via the Quadratic Interest Rate Volatility and Inflation Hedge ETF (NYSEARCA: IVOL).

This first-of-its-kind exchange-traded fund (ETF) attempts to protect against inflation by using Treasury Inflation-Protected Securities (TIPS), TIPS-based ETFs and long options. While the majority of its assets fall into one of the three categories above, the fund’s managers are also able to invest in both cash and interest-rate swaps that capitalize on a traditional herald of inflation: an anticipated gap, or a steepening, between the 10-year and 2-year Treasury note yields.

Currently, the fund is only invested in three areas: the Schwab U.S. TIPS ETF (NYSEARCA: SCHP), 85.10%; the U.S. Dollar, 9.79%; and options, 5.11%.

This fund’s performance has been relatively strong, even when including the damage done by the COVID-19 pandemic. As of June 1, IVOL has been up 0.69% over the past month and up 1.83% for the past three months. It is currently up 4.09% year to date.

Chart courtesy of StockCharts.com

The fund has amassed $3.23 billion in assets under management and has an expense ratio of 0.99%, making it more expensive to hold than many other ETFs.

In short, while IVOL does provide an investor with a way to turn inflation into a positive force, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

***************************************************************

Putting One Fake Foot in Front of the Other

Some men, when faced with overwhelming, life-shattering adversity, choose to embrace the circumstance. And in doing so, they live a life of epic inspiration.

In the new episode of the Way of the Renaissance Man podcast, I speak with just such a man, former Army soldier and retired police officer, Steve Martin.

Steve is an Afghanistan war veteran whose battlefield injuries cost him both of his legs.

Yet rather than allow that to stop him, Steve chose to overcome his personal battles, conquer his inner demons, and live a life that we all can aspire to.

From overcoming pain medications and becoming one of the first double-amputee field police officers in the country, to becoming an athlete whose participation in high-profile competitions has elevated awareness for life after amputation, Steve is a man whose mindset we all can learn from.

If you want to be motivated by a real-life hero and learn about his new adventure with an organization that I am proud to sponsor and support, Friends of Freedom USA, then you will really enjoy my inspiring conversation with Steve Martin.

*****************************************************************

In case you missed it…

Introducing My Secret Market Insider

Step aside, Woodward and Bernstein, I have my very own “Deep Throat.”

That’s right, I have my very own “insider,” in much the same way the two celebrated Washington Post reporters had in the 1970s when they broke open the Watergate story that eventually toppled President Nixon.

Only my insider isn’t telling me about the lurid political machinations at the White House. Instead, my insider tells me every day what is really happening in financial markets, why it’s happening and what the most important things are for me to focus on in the short and intermediate term to gain that extra alpha on the competition.

Now, I promised this insider that I would never reveal his identity, and because I am a man of my word, I never will. Yet what I have persuaded him to do is to share his insights with you, in much the same way that I get his insights each and every market day.

So today, I am proud to introduce a new product in Jim Woods’ universe of newsletter offerings. That product is called the Eagle Eye Opener, and it made its official debut on Monday, May 17, at 8 a.m. EST.

So, just what is the Eagle Eye Opener?

Well, think of it like a top-level intelligence briefing that gives you the heads up on what’s moving the markets and, more importantly, why markets are moving.

This insider intelligence also identifies the trends that day, what’s likely to happen in the short term and the medium term, and most importantly — what is the best course of action for you to take to profit from multiple market scenarios.

If you already subscribe to one or more of my newsletter advisory services, you know that I put a lot of research into each issue, and that I back up our investment decisions with that in-depth research. Well, a lot of my knowledge is bolstered by my market insider, as he is not only a friend, but he is also one of the smartest and wisest Wall Street analysts I know.

Most importantly, he has earned my trust over the years with his spot-on analysis and wise counsel.

And now, I can share that expert analysis and wisdom directly with you via the Eagle Eye Opener.

This publication comes out every trading day at 8 a.m. Eastern Time, and the best part about it is it only takes about five minutes each morning to read. That’s right, in just five minutes in the morning (maybe 10 minutes if you are like me and prefer to read slowly and methodically) you can gain an edge on the markets using the same institutional-level intelligence the pros on Wall Street use to make their big-money decisions.

Perhaps most importantly, the Eagle Eye Opener will help you avoid getting blindsided by market developments not covered deeply in the mainstream financial media.

Think of this publication as a kind of intel playbook. So, if you read it every day, you’re going to know what’s driving the market. You’ll know which way the markets are likely to go… and what to do when that happens.

You’ll also know what to do if it does the opposite.

That means you’ll know what to do ahead of time, whichever way the market swings… and you’ll know why and where the profit zones are.

Now, I am not claiming that this information is some kind of crystal ball, as there is no such device. However, it is the best tool I’ve found, and it’s the same information that Wall Street elites have at their fingertips each day — and now you can have it, too.

Once again, when you subscribe to Eagle Eye Opener, every trading day at 8:00 a.m., I’ll send you proprietary intel that was once for institutional investor eyes only. The intel covers breaking opportunities in:

  • Stocks
  • Exchange-traded Funds (ETFs)
  • Bonds
  • Currencies
  • Commodities

You’ll also get the latest economic data that impacts investors in the market, as well as special features that more deeply analyze certain market sectors or developments (e.g., the current spike in inflation, the latest on when the Federal Reserve is likely to consider tapering its bond buying scheme and what to look for in terms of the next big market catalysts).

For me, the content in the Eagle Eye Opener gives me the confidence of being forearmed with this information before the opening bell… all in just about five minutes of your time.

For more about the Eagle Eye Opener, and how it can do for you what it does for me and thousands of other Wall Street pros each morning, I invite you to check it out right now.

As you know, knowledge is power. And with the Eagle Eye Opener, that power translates directly into profits.

*****************************************************************

Fight For Your Right To Party

Don’t step out of this house if that’s the clothes you’re gonna wear
I’ll kick you out of my home if you don’t cut that hair
Your mom busted in and said, what’s that noise?
Aw, mom you’re just jealous it’s the Beastie Boys

You gotta fight for your right to party…

–Beastie Boys, “Fight For Your Right”

Fighting for your right to party might seem like just a humorous rap music refrain, but the wider issue is far from funny. You see, for more than a year, and basically since the pandemic lockdowns were implemented in about March 2020, the country has been waiting to unleash the party beast within and finally celebrate without masks, social distancing and fear of a viral planet.

Well, this past weekend, I experienced this sentiment, as I was in Scottsdale, Arizona, visiting friends and doing some work on the “Way of the Renaissance Man” podcast. And I must say that I fully exercised my right to party, and did so at a birthday celebration, at a sumptuous dinner and at Sunday brunch. Those celebrations came complete with red wine, champagne, whiskey, tequila, fine cigars, steaks and decadent desserts. The celebration was also mostly without masks, social distancing and worry over becoming sick.

Now, I am not suggesting that a party weekend of this sort is recommended on a regular basis. After all, consistent overindulgence is anathema to a life in balance. However, after more than a year of quarantine conditions, the world deserves to exercise its right to party. So, get out there and let yourself celebrate the indulgences you love most, whatever they might be. I strongly recommend it.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods

Log In

Forgot Password

Search