America has a cash problem.
As we talked about last week, soaring prices combined with very little income growth have created a crisis for many Americans.
I’m known primarily as a growth investor, and that’s entirely accurate. But I also recognize the urgent need many people have for more cash. They need their incomes to be running faster than inflation right now to pay for living expenses, home expenses, medical expenses, and the like.
We need to find ways to make a lot more money outside of our regular jobs. We need ways to leverage our savings to make a lot more money.
And after challenging myself and my team to push ourselves farther than ever, I believe we’ve come up with an incredible solution that could be a life saver for many, many people.
Our hyper-intelligent computers play a major role in uncovering the best specific investments, but today, I want to encourage you to think about how traditional income-generating strategies may not adequate in the current environment.
When most people think of income investing, they think of dividend-paying stocks. I have nothing against dividend-paying stocks, and they are often a good choice for many investors. But they do have some flaws.
Mostly, you need to start with a lot of money to make money. For example, the S&P 500’s yield is only around 1.4%. Let’s say you find a good stock that pays a 6% dividend, which is more than four times the S&P 500 yield. You would need to invest $100,000 just to make $6,000 per year.
With higher returns comes higher risk, so some investors use options to generate income. The most common strategy is “covered calls,” which involves owning the stock and then selling call options against it to collect cash.
The problem is that most people don’t fully understand short-term options and don’t use them intelligently. You can indeed make a lot of money using options, but they are risky and confusing for the average investor.
And the other popular income investment is bonds, but they aren’t a great solution either. Government bonds are getting eaten alive by inflation, as are pretty much all fixed-income investments. And even if you do find a good bond yielding 5%, we’re right back to what we talked about with dividend stocks – you need to start with a big principal to make a decent return.
We need to get back to the best, most important outcome of any investment…
Big gains. Specifically big realized gains.
Realized gains generate cash. You can be sitting on triple-digit returns in a stock, but if you haven’t taken any of the profits, you don’t have the cash. It’s a “paper gain,” and you can’t pay bills with those.
This isn’t what you’re used to hearing, which is why I’ve said we need to rethink our whole notion of income investing. This requires shifting your thinking from focusing on the amount of money in your account –those unrealized gains – to start focusing on cash flow. That is, having a large amount of money flowing in from your investments every month.
With my Make Cash Now Project, I looked at dozens of asset classes each with thousands of individual investments. I analyzed dividends, options, and bonds. Then there’s real estate, annuities, variable annuities, REITs, master limited partnerships, private equity deals, CDs, royalties, spin-offs, even peer-to-peer lending.
After all my analysis, the numbers kept pointing me to the same conclusion: If you want to see huge reliable income… money rolling in regularly… the answer comes back to a very select group of stocks.
These aren’t just any stocks. They are “accelerated-income generators.” And to identify these accelerated-income generators, our database crunches eight critical factors that I call “income indicators.”
These eight factors are the common denominators in massive short-term price movements.
- Positive Earnings Revisions
- Positive Earnings Surprises
- Increased Sales Growth
- Expanding Operating Margins
- Strong Cash Flow
- Positive Earnings Growth
- Positive Earnings Momentum
- High Return on Equity
These income indicators aren’t revolutionary in and of themselves, but the combination of all these factors together is the real breakthrough. When all eight meet their strict pre-determined values at a single point in time, my research shows this is the critical point when a stock begins moving up.
And when one of them no longer meets the criteria, it’s time to sell and claim that cash.
Capital gains in stocks aren’t normally thought of as income, but it may be time to start thinking about them that way when more cash flow is needed in a time of inflation.
Louis Navellier, Market 360
P.S. We all know inflation has become a huge problem in America.
The price of everything is going up. Groceries, gas, health care, education…
It’s a terrible situation for people still working, but it’s even worse for those who aren’t. These folks are counting on their nest eggs to provide them with security and comfort.
Today, I’m pulling back the curtain on what the one percenter do – actually the top ten percent of the one percent.
Anyone can use the secret I’ll tell you about today to gain a better understanding of what is really happening right now. I’ll even show you some ways to make more money.