For centuries, most investors—individual and institutional—have tended to achieve only below-average results because they repeat the same mistakes: lack of knowledge about how financial markets work; buying high and selling low; succumbing to the foibles of their human psychology; following Wall Street’s so-called “wisdom;” failing to use risk management tools; and falling victim to sudden market crashes that erase earnings.
To avoid these mistakes, James walks you through a proven investment process that leads to steady long-term gains under any market condition. His philosophy and approach are based on decades of investment experience, understanding market cycles, using strategic research to identify market opportunities and pitfalls, and employing numerous risk management tools to prevent catastrophic loss.
Throughout this book, I will illustrate for you the importance of creating a “wealth plan”—a well-thought out and proactive strategy to guide your own investment process. I will help you develop a better understanding of how to invest, when to invest, where to invest and in what type of securities. I will provide you with insight into my process of selecting securities, based on my more than three decades of experience. Most importantly, I will help you learn to maximize your returns while managing your own downside risk to avoid catastrophic loss.
I strongly believe that it is better to have a prosperous society than to have a struggling one. People at all income levels need to understand investing so they can build the assets they need to provide for their families, educate their children, and ensure that they have enough income saved for retirement and financial independence.
In the spirit of making investing a topic that you will come to love, rather than one which terrifies you and makes you want to avoid talking to financial advisors of any kind, I decided to make this book fun and enjoyable to read. In each of its chapters, you will find many types of readings (short articles, longer articles, personal stories, and special features), illustrations and graphical presentations, quotes about investing, and more.
I hope you will keep it on your coffee table, at your bedside, on your desk at work, and browse through it from time to time for the famous quotes, the artwork, and the stories of investors—people like you have discovered that investing the right way is their new passion.
Here’s to your financial future.
The SMART Investment Strategy
The Journey to Wealth describes how you can create real wealth using a strategy that works in today’s volatile, globalized financial world—a proven strategy that increasingly builds returns without succumbing to catastrophic market crashes.
The traditional “Wall Street wisdom” that follows modern portfolio theory of diversification and a “buy and hold” mindset is no longer effective in today’s highly chaotic, fast-paced markets. You cannot simply ‘set it and forget it” when buying stocks, hoping that market fluctuations will turn out in your favor. Nor can you find safety using mutual funds, index funds, and other managed assets whose fees eat away at your returns while carrying the same market risks as stocks. This approach is why most investors get below-average results out of their portfolio.
What it takes to grow wealth in today’s financial marketplace is a SMART philosophy of investing. You must understand the relationship between the business and market cycles, utilize “stock sector” investing timed to the cycles, and make use of valuable tools to mitigate the risks of unpredictable market declines. You must know how to identify the winning stocks while avoiding those that are already past their prime; how not to pay too much for a stock; and most of all, how to ride the “bull” markets and get out early when a “bear” market approaches.
James E. Demmert developed the SMART philosophy of investing over thirty years of experience as a wealth manager. His process of investing combines a sound knowledge of stock market history, its economic cycles and patterns of peaks and troughs, and the role that investor psychology plays in investing. He shows you how to perform your own critical research and use numerous Active Risk Management tools that can protect every investor from the “ugly math” of steep losses.
No matter what your level of experience is, The Journey to Wealth walks you through the world of investing using a clear, easy-to-follow sequence of concepts. In a four-step planning process, you will learn how to precisely identify your lifestyle goals for building overall wealth for your immediate and long-term needs, as well as how to invest according to your risk tolerance and preferences for investing. Straight-forward detailed explanations, charts and graphs, inspiring citations about wealth creation, and artwork will keep you reading, learning, and creating a SMART investment plan for your future.