Grow Your Portfolio the Intelligent Way

Get Yourself A Chow Chow 

By Jim Woods

We all know the cliché that a dog is “man’s best friend.”

Well, let me tell you something, man needs best friends. In fact, as social animals, building a network of close friends and trusted associates is imperative to a life well-lived. Of course, finding those you can trust and that “have your back” isn’t always the easiest of propositions.

Yet when it comes to canines, generally speaking, if you treat a dog well, he/she will treat you even better. Like humans, dogs are social “pack” animals, and they are hardwired by nature to help protect their pack. That means they are hardwired by nature to be your friend and ally, and to have your back.

I saw this trait play out firsthand this past week, as my canine, a chow chow named “Hemingway,” put the smack down on a most unwanted intruder. 

You see, I live on a small horse ranch in Southern California. In addition to horses, there is a barn, and around the barn, there are many feral cats and kittens. Yes, I feed them all, and so I am not surprised they keep coming around. But I like cats, so I choose to make sure they have plenty of food. Yet while I choose to feed and welcome the cats, I definitely do not welcome the coyotes that come around to try and make a meal of the felines. 

A few days ago, Hemingway was barking rather aggressively, wanting me to let him outside. It was about 3 a.m., which is an unusual time for him to want to go outside. Still, I obliged his request, and as soon as I opened the back door, Hemingway sprinted outside and ran full speed toward the barn.

I had a flashlight handy, and as I shined the beam in the direction he ran off, I saw that Hemingway had cornered a full-grown coyote. Both sets of fangs were out, and I was about to witness some canine combat.

The next moment Hemingway bolted toward the coyote and knocked him against the side of the barn with a body blow reminiscent of a tackle from the great Baltimore Ravens linebacker Ray Lewis. After bouncing hard off the side of the barn, the coyote sprinted away from my property and into the cover of the early morning darkness. 

I have seen no signs of its return since. 

Your editor with “Hemingway” the chow chow. 

This incident reminded me of the importance of putting people, or in this case a chow chow, on your “team” that can help you get through difficult, even combative situations. And while my chow was just being a chow, i.e., an aggressive and strong breed known for its powerful build and protective nature, he nevertheless lived up to his nature by kicking that coyote’s butt.

Because you see, in life, sometimes we need to kick a coyote’s butt. 

Sometimes we have problems that require tough, no-B.S. action that must be taken to achieve a result. Many times, these are business problems, and at other times legal problems. Sometimes those problems are medical, or relationship-oriented, or family-oriented. And sometimes those problems are about investing. 

That’s why it’s imperative that you build your own personal network of tough chow chows who have your back when the coyotes come calling.

So, make sure you have good friends, real friends, that can help pull you through the tough times. And in turn, be a good friend to them when they require some assistance. Because guess what: we all require some assistance at some point in our lives.

You also should make sure you have a cadre of professionals on your team who you trust to get you through the tough times. 

For example, have a great lawyer on your team. I can tell you that I have never regretted spending money on a good lawyer, and you won’t either. Also have a good certified public accountant (CPA) or tax person on your team. Pay extra for them, because I guarantee you it will save you money in the long run.

Next, cultivate a personal relationship with your physician. A physician who knows you personally is likely to give you a little extra attention, attention that is required as we get older and as our medical needs accelerate.

And, of course, if you are having trouble with your finances, and especially if you are having issues getting the results you want from your investments, well, that’s what my newsletter advisory services are all about.

Finally, if you are in need of a protective dog that will fight off intruders, but that also will sleep lovingly at your side each night while also looking like a real-life Teddy bear, then do yourself a favor and get yourself a chow chow. It might be the best investment you’ll ever make.


ETF Talk: Hedge Against Inflation with Basic Materials

I recently have been exploring several exchange-traded funds (ETFs) that might be useful hedges against inflation, which could rear its head in the days to come.

One option for investors looking to protect the value of their money is Invesco DWA Basic Materials Momentum ETF (PYZ). This fund combines a sector-based approach to investing in basic materials companies with the momentum thesis – that is, the idea that stocks that have recently gone up are likely to continue to go up.

The fund invests in U.S.-based companies that are involved in raw materials production, including wood, paper and agriculture, as well as mining and other industries. Of those companies, PYZ selects 30 or more stocks — most recently, it held exactly 30 — with relatively strong price momentum according to a relative strength index. This also is used to determine the weighting of positions within its portfolio. Holdings and weights are determined on a quarterly basis.

The stocks in this fund currently are on the larger side, and are not very volatile, at least based on its most recent quarterly rebalancing. As the chart below shows, PYZ has shown strong performance in the last 12 months, moving practically straight “up and to the right.”

Chart courtesy of

The fund is up more than 85% over that period, with a gain of 25% this year alone. Over both those time periods, it compares favorably with a simpler basic materials strategy, as measured by iShares Basic Materials ETF (IYM). PYZ has net assets totaling $114 million, a yield of 0.73% and has an expense ratio of 0.60%.

The top five holdings of this fund currently are Steel Dynamics (STLD), 4.65%; U.S. Steel (X), 4.18%; Freeport-McMoRan (FCX), 4.16%; Olin Corp. (OLN), 4.07%; and Avery Dennison Corp. (AVY), 4.07%. The top 10 holdings make up 40.71% of total assets.

Commodity-based companies have long been considered one path to hedging against inflation. For investors who believe in that strategy, as well as the time-tested concept of stock momentum, Invesco DWA Basic Materials Momentum ETF (PYZ) may provide a useful investing tool.

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, becoming one of the first double-amputee field police officers in the country and participating as an athlete in high-profile competitions, Steve has elevated awareness of life after amputation and 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 is 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 makes its official debut this 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 is 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.


Song for a Neighbor 

I don’t want a know it all for a teacher

I don’t need an anthem for a song

I don’t want a saint for a preacher

I don’t want a landfill for a lawn

I don’t want a loudmouth for a president

I don’t cheer for the red or blue team

All I want is a neighbor I can learn something from

Be good to them and they be good to me

–Seth Avett, “Song For A Neighbor” 

He’s one of the two “Avetts” in the iconic Americana band “The Avett Brothers,” and in this song, Seth Avett expresses some folksy wisdom that I think resonates with a lot of people. I know it resonated with me. So, know what you don’t want, and be good to your neighbor. It is one of the many secrets to a happy life. 

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.


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