A Certain Hedge Fund Manager’s Wife Will Hate This Article… But You’ll Love the Profits

Keith Fitz-Gerald Sep 23, 2016
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Many investors believe that hedge funds are the ultimate end all, be all when it comes to making money because they “know better.”

What a load of hooey.

Today I want to tell you about an investment that’s helping investors just like you beat hedge funds at their own game while racking up profits that most of them would love to have – especially considering how poorly they’re performing in recent years.

Starting with a story that’s simply too good not to share…

This “Too Good To Be True” Investment Has Turned Every $10,000 into $80,518

I’ve got a brilliant young editor working on my team named William “Wills” Dahl, and he hit me up recently on Skype with a grin.

“Wait till you hear this,” he said.

Wills was at home in Virginia recently enjoying a family barbeque when he struck up a conversation with the wife of a very well-known hedge fund manager about the “best” investments in today’s markets. (She and her husband shall remain nameless for reasons that will become clear in a moment.)

Quickly sizing him up as a young investor on the move, she recommended a Dow Jones based index fund as the best, most reliable way to grow your money over time.

Wills pushed back respectfully by describing a fund that I’ve recommended in our sister service, the Money Map Report, as a better alternative under current market conditions, noting that it:

…has a much more stable share price

…has beaten the markets 3-to-1 over the past 12 months

…pays an impressive 10% yield; and,

…has done so for the last 22 ½ years, allowing any investor to turn every $10,000 invested into $80,518.

Any normal investor would have said, “Tell me more!”

Instead, she patted Wills on the arm, drew herself up, and in a very patronizing voice loudly proclaimed, “My husband manages a fund with $1.5 billion,” before continuing, “if something like that existed, it would make a lot of people very happy.”

Well it does exist – and I’d like to share it with you now.

I recommended the PIMCO Strategic Income Fund (NYSE:RCS) to Money Map Report members last September because I saw a great opportunity to lock down a stellar 12% yield and capital appreciation at a time when the markets made both seem like an impossible task.

Hundreds of thousands of readers are glad I did.

Exactly one year and a day later, RCS has delivered $0.96/share in payouts to every investor who followed along, which means that anybody following as directed has had the opportunity to receive $1,200 in cold hard cash for every $10,000 invested.

To put that in perspective, a similar investment in 10 Year U.S. Treasuries would have generated only $218 in income. Even Altria, one of my favorite Dividend Aristocrats, generated only $380 in income over the same time frame.

What’s more, RCS has appreciated more than 20% since then, which is nearly double the Dow Jones Industrial average’s return of 11%.

All in – meaning including income and appreciation – RCS has beaten the Dow and any index fund tracking it by 3-to-1 over the past 12 months.

And over longer periods?

The advantage drops to “only” 2-to-1.

Source: dividendchannel.com

Source: dividendchannel.com

That’s enough to produce a total return of 646.12% and an average annual return of 10.57% that dwarfs the pathetic 1.66% offered by 10 year treasuries at the moment, and even the 339.35% from the S&P 500 over the same time frame.

Many investors ask me if this kind of performance can continue given the state of global finance and our Fed, in particular.

I believe the answer is yes.

Since 1994 RCS has enjoyed 271 consecutive months of payouts through thick and thin. It’s never wavered… not through the Dot.bomb Crisis or the Financial Crisis. And it’s not likely to with Yellen trapped between a rock and a proverbial hard place when it comes to rates.

Like many bond funds, RCS invests at least 80% of its capital in a combination of U.S. paper, select foreign government securities, public or private asset based securities, corporate debt obligations and other income instruments from U.S. and foreign entities, corporations, and munis.

However, unlike most bond funds, RCS also has 6.83% in non-U.S. developed paper and 6.41% in emerging market instruments, with the flexibility to add more if its managers determine that’s appropriate.

That means the fund and its managers can adjust to changing market conditions on the fly. Most bond funds are about as flexible as a brick wall. So are stock index funds, for that matter.

As I write this, RCS is trading at around $10 a share and pays a monthly distribution of $0.08, which translates into a solid 9.6% yield that will very likely once again move into the double-digits when you include the annual special distribution typically paid every December.

I urge you to check it out if the notion of rock solid prices, high yield, and gobs of cold hard cash is appealing.

So much for patronizing hedge fund managers and their spouses, eh?!

Until next time,

Keith

2 Responses to A Certain Hedge Fund Manager’s Wife Will Hate This Article… But You’ll Love the Profits

  1. Nolan says:

    Hi Keith, We took your advice and transferred my wife’s conservative funds into RCS in March 2016. We are elated that this has been a consistent performer. My only regret is that I didn’t invest some of my own funds into it as well. Maybe it’s not too late?

    Thank you for your informative and timely articles as we look forward to it every week.

    • Keith says:

      Hello Nolan.

      I’m thrilled to hear that RCS is working out for you. And, no…it’s not too late for any investor who wants to get on board. Obviously, keep your risk under control and make sure that the additional monies fit your individual risk tolerance and circumstances. Every investment has risk and past performance, as they say, is no guarantee of future results.

      Best regards and thanks for being part of the Total Wealth Family, Keith 🙂

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