I’m going to break it down how exactly to implement a strategy that has allowed me to beat the market consistently and will set me up for major success and lead me to early retirement.
GVD strategy is an extremely effective way to invest. This strategy has worked out tremendously for me and since I went to this philosophy it has been a game changer. Over the last few years, I can just tell you it's taken my returns to whole a different level than they've ever been. I'm going to give you a tremendous amount of value okay tremendous amount of value this is not the type of thing that's going to make you rich tomorrow and make you rich next month this won’t work for you.
It's not how this works but if this strategy is implemented well, you can absolutely get rich over a 5, 10, 15-year span. I mean it's life-changing people tend to way overestimate what they can accomplish in a matter of weeks in a matter of months, and they tend to way underestimate what they can accomplish over a five ten-year span.
I'm going to show you guys real life examples on how I’ve made this work and things like that is first GVD what does this stand for and how do we use this.
G = Growth Stocks
V = Value Stocks
D = Dividend Stocks
these are the three types of stocks you can buy in the stock market. What I’ve learned is in order to be a truly great investor, not a good investor I’m talking about a great investor. We are talking about the one percent of investors. in order to be in there, you really must implement all three of these strategies.
We are looking for the best the best that you can possibly find in each of the investing types of GVD.
a stock that's you know ideally growing at least 10 revenues plus per year and they're expected to for years and years to go in the future. If you're thinking, how do I know if a stock is growing revenues 10 plus percent per year? you have got to really research these companies you have got to you got to listen to conference calls.
this is all available on the investor relations page this is all about you putting in the work at the end of the day. none of this information is like hidden behind a glass door. This is all free information. You want to find if this was a great growth stock in the future.
But really if you’re looking for the right type of growth, you’ll be aiming for a stock that has 20% growth year over year and will continue to do that for the foreseeable future. 10% is okay if you are not in maximum wealth accumulation phase.
A value stock is a security that is trading at a much lower price than what the company’s performance may otherwise indicate. Investors in value stocks attempt to capitalize on inefficiencies in the market, since the price of the underlying equity may not match the company's performance.
I will discuss how to find these in another blog post. In fact, just to mention this blog is mainly focusing on helping you learn the behaviors needed to be a good investor and know what your overall arching goals should be. I will link how to find a good value, growth and dividend stock through my articles for more in-depth detail. For now, we are talking the basics.
You cannot find a value stock without first researching the company and how it sets itself apart from its competitors. You also need to have a core understanding of how to analyze a balance sheet. Listening to conference calls will help you understand the business on a level that you’d never otherwise understand. These three habits will set you apart from 99% of other investors.
Dividend stocks are companies that pay out regular dividends. Dividend stocks are usually well-established companies with a track record of distributing earnings back to shareholders in the form of cash.
You can choose to reinvest those dividends into the same stock or into other stocks. An example of what I did during the pandemic was invest massively into a few dividend stocks and I will use the income they pay to buy growth and value stocks.
- Due diligence
- Company Quarterly and Annual reports
- Conference calls
Due Diligence - Step one you will be learning and reading news and history of the business. What sets then apart from its competitors? For example, we can learn about Pepsi and Coca-Cola. Look into how the companies started, learn about what sets them apart, what products does one sell but not the other, etc. Reading this type of information will allow you to have a deeper understanding of the product or business and allow you to understand the company on a new level.
Company Quarterly and Annual Reports – Reading these will allow you to understand the core fundamentals of the business. You’ll learn how to read financial statements that will help you give valuation to a stock. This will help you when value investing especially.
Conference Calls – Listening to these will allow you to understand where the business is going now, and you’ll learn what the struggles were for the year and quarter. You’ll also hear about big wins the company had in these calls.
All three of these skills will set you apart and turn you into the top 1% of retail investors out there.
Let’s going into some detail about some real-world situations so you can understand the importance of having these investing skills.
Doing your research will pay out massively in the end. It may save you from investing into a company that is going down. It may earn you a ton of money because you understand the company and its direction on a whole new level that 95% of other people just don't know. before you ever invest into a company you need to read its latest quarterly / annual reports and listen to the company's latest conference call.
In these reports you'll learn what the business is going to focus on over the next 3 months to grow the company. You'll learn about where they aren't doing well and what they're doing about it. You are going to understand the fundamentals of the business and its plan for growth that you never would have known otherwise. Now look, these reports can be kind of dry. We can be honest with each other.
It's not very often that you get someone on a company conference call that is super energetic and fun to listen to. Most of the time is straight to business and they suck your soul like your 10th grade history teacher that hated their job. But you will gleam some information out of these meetings that will give you an edge over anyone else. Let's take Coca-Cola for example. As a regular human being I know what coke is, I know they occasionally put out a new beverage that is interesting. But that is about the extent of what I know their business model is.
Do you believe that on a corporate level that scheme 9-5 all year about what new flavor is going to hook new users into drinking their products? No way Jose. They are talking marketing plans, sponsorships, purchasing smaller beverage companies that are wildly successful. Coca-Cola not only has the regular line up that we all know. But did you know they sell coffee, tea, juice, energy drinks, sports drinks, dairy drinks, plant-based drinks, collectible coke products, accessories, apparel and even some physical locations where they sell their products. It's so much more than just a drink company.
You have the opportunity to see a side of the business nobody else would know if they hadn't read these reports. You'll see that Coca-Cola is on a journey in certain sectors to be using only 100% recycled plastics and plans to continue that shift. You'll learn that certain revenue streams have increased 300%. These are examples of actual useful information that you need to know
When investing into a company. It's important to know these things if you decide to put your money into the company compared to thinking I wonder if Coca-Cola will ever release a raspberry flavored coke.
the reason to know the business behind the company is that when your investment comes on hard times and has a bad quarter. You'll have a sound understanding of the overall business model and know what is going on with the stock price. Why is this important? It will give you diamond hands. Serious. Imagine having never tasted a coke product, or learned about their business model, or having never understood what the company is doing to beat their competitors. What will you do without understanding these things?
You're going to sell. 10/10 times you will paper hands the second the stock falls on hard times. Learn the company and its business and if you feel good about it's future its likely going to do well in the future. This type of research will massively affect the types of returns you'll get from your investments in a very positive way. If you don't know what a company is doing, where they are going, what they do with their revenue. Do not invest into that stock.
Now look this might be super hard for you to make sense of at first. With practice you will get faster at spotting the necessary information and will be able to breeze through the financial reports. This part is much easier than reading the company’s quarterly reports. Those reports will give you information that is very good to know, for example you might learn that the company ran a super bowl ad and that brought in 300% more customers for the quarter over last year.
From that report but in the but the revenue from those customers won't roll in until next quarter. This will help you decide to buy in now while stock price is lower. Likely what is going to happen is that when next quarter's numbers roll out people will be buying in left and right, but you got in early because you know how to read these reports. To put in perspective a few things with a company's balance sheets. You have one too whether you realize it or not. You have income, you have investments, and debt and expenses just like a company.
If there is anything I need you to get out of this is that before you ever invest into a stock you do these three things.
- Read company quarterly reports.
- Listen to latest company conference call.
- Learn about company history and future.
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Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.