The US equities market has been in a strong bull market for almost ten years. While many on Wall Street see more room for gains, one financial analyst Ted Bauman believes there are equal odds for a stock market crash or a continued bull market. He has recently written that investors should look to preserving their wealth. Mr. Bauman is an economist and not what you would call a normal stock analyst. His experience as an economist enables him to have a broader view of the markets. He has worked for Banyan Hill since 2013 and serves as the editor of the Bauman Letter. Wealth preservation is a major focus for Ted Bauman and he recently wrote an article in which he gives common sense advice to those looking to maintain their current level of wealth.
Unlike finding the next hot growth story, Ted Bauman promotes a defensive approach to investing. He believes that a common mistake that many investors make is they try to shoot for a home run and make the largest possible gains in as little time as possible. He believes that investors who choose strategies to protect their capital will outperform individuals in the long run who don’t take the defensive stance in investing.
Ted Bauman also pointed out that a defensive investor will invest not only in stocks but in bonds as well. Investing in bonds is like dividend investing, the investor relies on interest payments as a stream of revenue. Many investors ignore bonds because they may not understand them, or they may choose to stay in the more glamorous growth stocks. He explains that bonds can be a cushion for an investor’s portfolio in times of a stock market crash, which is why it is prudent that a portfolio is properly diversified with both stocks and bonds. Whether or not we see a crash in the equity markets in the near future, the advice that Ted Bauman gives his readers will enable them to not be caught off guard if the unexpected in the markets were to happen.