Outperform the stock market in any condition
We’ve uncovered an incredible strategy that elects only the safest, most profit-packed shares on the Johannesburg Stock Exchange (JSE).
In fact, professional investors Walter Schloss, Irving Kahn and William J. Ruane all used it to make a fortune.
And – to this day – it helps South African investors who understand how it works regularly make money. It’s more than doubling the returns of the JSE between 2010 and 2018 with a 32% yearly average over the past eight years.
In short, it has the potential to make more money for investors of all stripes – and remains the most profitable way of succeeding in the stock market to this day.
“The Rule of 72”
And it’s a classic investment and saving rule that will help you easily determine how long it will take your investment to double in size.
It looks like this…
For example, if you put away money into a deposit account that yields 8%, it would take 9 years for your income to double.
Or if you receive a yield of 10%, it would take 7.2 years for your income to double. And so on.
Just remember, the time frame it takes to achieve your goal expands exponentially, the lower your portfolio yield is. This is because your portfolio yields less income. Consequently, that income compounds at a slower rate.
Regardless, this rule can help you determine how long you need, to achieve a desired portfolio size or how many years you need to keep investing all of your returns to achieve your set goal.
I‘ve been waiting four years to share this with you...
If you bet on the cricket, you’ll have heard of these two.
One is a record-breaking batsman, and the other the most experienced player in cricket.
To the average punter, these two favourites don’t exactly scream ‘profit machines.’
But here’s the thing...
There’s a small group of unconventional punters out there who are very, VERY excited about them...
Because they’re using a specially designed ‘betting code’.
This code is so powerful; it could see average South African punters land as much as 93% profit by the end of the cricket tournament.
Why this rule is best used with income investments
While you can use the rule of 72 to calculate your return on growth investments, there’s a limitation to doing this.
You see, when you invest in say a portfolio of growth stocks, you can’t be 100% sure of the exact return you’ll receive in the future. The reason is, share prices continuously fluctuate.
However, you can control the amount of income your investments make you. For example, when you invest in a bond, you’ll always know the return (fixed rate) that you’ll receive.
Even if you wanted a portfolio that yielded 10%, you could even put money into a range of income investments. As long as you maintain your desired 10% yield for those years.
That’s what makes it a great tool for investors building their portfolio for retirement. The key thing for a successful retirement is to ensure you have enough income to live comfortably.
Just remember, for the rule of 72 to work for you, it’s essential to keep a yield target in mind. Our aim at Real Wealth is to own investments that yield double the stock market.
See you next week,
Managing Editor, Real Wealth