90/10 Crash Protection Strategy
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Gold does not protect assets against crashes and recessions. The precious metal declined by 12% after the bursting of the dotcom bubble. Gold declined by 17% during the 2008 crash and Great Recession.
Diversification does not work either. Since all stocks decline during crashes and recessions so do all mutual funds and ETFs.
Under the 90/10 Crash Protection strategy:
- 90% of liquid assets are invested in government guaranteed bonds which mature in 5 years.
- 10% is invested into a diversified portfolio of venture stage private and public companies.
The theory behind the 90/10 Crash Protection strategy is simple. When a secular bull market reaches eight years or older invest 90% of liquid assets into bonds that are guaranteed to grow back to the total invested amount. The remaining 10% is invested in investments that have the potential to grow exponentially.
The chart below illustrates that small stocks significantly outperformed big stocks during all the recessions that occurred between 1945 and 2007 according to the Investment U which is the educational arm of the Oxford Club.
The table below illustrates how a 6% return can be made from effectuating a 90/10 Crash Protection Strategy while at the same time avoiding the potential losses that could be incurred by holding stocks during a market crash and recession.
A diversified venture portfolio could potentially yield the next UBER, Airbnb, WhatsApp or Snapchat. Should that happen, the total return from effectuating a 90/10 Crash Protection strategy could be life changing.
The provider of the venture stage investing opportunities that BullsNBears is recommending is Trophy Investing. The firm excels at identifying startup and early stage investment opportunities which have the potential to multiply in five years or less. Michael Markowski, the founder of BullsNBears is also Trophy Investing’s Director of Research.
Trophy Investing is unique since it finds opportunities that require minimum investments which range from $100 to $500. The small amounts enable the 10% portion of the 90/10 Crash Protection strategy to be well diversified.
Click here for access to a FREE 60-day trial offer to Trophy Investing. This offer is exclusive to BullsNBear’s followers and includes the following:
- Access to startup picks
- Reports and videos about the picks
- 7 video online course about startup investing
The US Government Treasury bonds can be purchased from the following:
- The US government’s website https://www.treasurydirect.gov/
- A commercial bank
- Traditional and online brokers