Josh has really mastered the art of investing and making returns I make with trading.
In fact, the Real Wealth Portfolio has generated an average 35% yearly return for the last seven years.
For this reason alone, I scheduled a meeting with Josh, so we could try and get a few secrets and tips on how he’s achieved this phenomenal investment gain success.
Enjoy the interview.
Q – Many young people who want to make money from stocks usually have a short-term view. But what’s interesting about you is, as a young guy, you consider yourself a long-term investor. Is this accurate?
A – Yes that’s right. I’ve always believed that to build wealth through investing, it takes time and patience.
So I usually hold an investment anywhere between three to ten years – unless something detrimental to the company happens.
By taking a long-term view, I ignore any market volatility or economic downturns and rather focus on finding quality long-term companies for my readers that thrive in any market condition.
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Q – Speaking of finding quality companies, how exactly do you pick the right company?
A – Well, before I began investing, I studied and back-tested around 20 of the world’s greatest investor’s strategies over two years. Strategies from James O’Shaughnessy, Benjamin Graham, Martin Zweig and Walter Schloss to name a few.
I wanted to know exactly how their proven strategies made investors a fortune through economic depressions, wars, oil crises, asset bubbles and stock market crashes.
So I then identified only the proven fundamentals that these investors use to pick profitable companies. And from there, I developed the basis for my own investment strategy. In short, I look for quality companies…
• That demonstrates “staying power” which involves strong track records, good history and quality management
• Trading below their REAL value
• That have achieved profit-growth over at least the last five years
• With a combination of growing cash flow and decreasing debt
• That reward shareholders through dividends or share buyback programmes
I use this strategy as a basis to identify quality investments for the two portfolios I manage – Real Wealth
and the South African Investor.
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Q – Great! Sound interesting. Over the past few years, we’ve experienced significant periods of volatility in local and international markets and investors have found it quite hard to generate decent returns. Considering this, how has your strategy performed over the past few years?
A – Yes I agree that generating good returns has been hard to come by - especially in 2016. Even the South African Investor
and Real Wealth
portfolios that I manage, didn’t perform as well as previous years.
But like I said, I take a long-term view of the markets, so one bad year is not a problem.
The great thing is, over the past seven years, Real Wealth portfolio
has generated a 35% average annual return in seven years, while the South African Investor has generated a 28% average annual return for the past 17 years.
So you can see how powerful investing for the long-term can be. But my aim every year is to at least generate returns that beat the market and inflation.
Q – Yes agreed, it’s important to generate returns that outperform the market and especially inflation. Following on from that, have you made any significant returns for your readers over the past few years?
A – I’m happy to say, definitely. In fact, that’s why I do what I do – To help ordinary investors make money from investing to build long-term wealth.
The reality is, we won’t find winners every time, but the track-record proves that our winners substantially outperforms the losers.
I’ve got the portfolios to Real Wealth and South African Investor on my computer.
*Josh reads out the portfolio results*
Over the past year, the Real Wealth portfolio sold:
• Afrocentric and made a 98% return
• Nedbank and made a 44.9% return
• FirstRand and made a 57% return
• Mr Price and made a 188% return
• Oceana and made a 250% return
We also made relatively small losses on Bowler, Sabvest and Holdsport.
And when it comes to the South African Investor portfolio, here’s what we sold:
• Woolworths and made a 52% return
• Tiger Brands and made a 47% return
• New European Property Investments and made a 84% return
• Datacentrix and made a 27% return
We lost out on Redefine International and Medi-Clinic.
Q – These are fantastic returns considering the volatile markets we’ve been experiencing over the past few years. Finally, one of the most important things when it comes to investing is protecting what you have. How do you protect your portfolio?
A – Well I couldn’t agree more. Making money is great. But protecting your money is extremely vital as any bad news can send your portfolio crashing.
That’s why, you must have an exit strategy in place. By this I mean, use stop losses.
For example, my general rule is a 25% stop loss. But you can go in even more detail than that. I’ve read a few articles by the Founder of TradeStops.com, Dr. Richard Smith.
In short, Dr Smith analysed the portfolios of various investment newsletter editors. And developed the “smart stop”. Effectively what this is a stop loss that tailored to a specific investment. For example, penny shares are generally more volatile so you can tailor your stop loss to around 50% instead of 25%.
This is a great way to not get stopped out too early. And I recommend all my readers to use it.
Q – Thank you Joshua for your time and profitable insight. I just have one more question for you. How can my 35,000 subscribers diversify their portfolio’s and also start banking these triple digit gains with investing?
A- There are three ways your subscribers can join.
• Through our free e-letter called MoneyMorning
They can read all about what each one does and they can choose which suits publication will suit their personality and financial desires.
This article came from Trading Tips
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