Successful Investing

This past Saturday, the Hicks family gathered at my sister's house to celebrate my mother's 65th birthday. We'll celebrate my father's 66th birthday in about a month.

My parents have been retired for about three years now...

They're healthy and in decent shape. Their only dilemma is where to watch little league games on the weekends, since they have 11 grandchildren (five from me).

So I made sure as they got closer to retirement, they wouldn't stress about money. This was a little tricky, because my parents were retiring at a time when the economy and stock market were seizing up like a car engine with no oil.

But I made one thing vitally clear to them: During this period, return of capital is more important than return on capital.

Preserve the cash ? that's what fortunes are made of. (It also helps you sleep well at night.)

I told them eventually, the market will come back. We have to be ready when it does.

I've been preaching this for years...

You may remember back in November of 2011, I gave you my 5 Rules for Successful Investing.

With the Dow now making new record highs, let's revisit those rules...

Note: My rules don't address specific sectors, because sectors that are in favor one decade won't be the next; this is a template for investing in any market sector in any market environment.

1. Protect the cash: That?s how fortunes are made.
   Depending on the market environment, there are times when I make five trades in a day.

   But there are also times when there?s no investment to make. I?ve gone days, weeks, even months without deploying investment capital... but when I?m ready, I have a nice big bankroll to use. So be patient.

2. You need to take 100% control.
   As my above experience proves, you need to have 100% control of your financial destiny. If your broker or money manager dismisses your concerns, questions, or objections, fire him immediately.

3. Liquidity.
   Make sure the investments you are in are liquid. If you get stuck in an investment that goes ?no bid,? you could be in an investment (housing, for example) for months, even years, with no way out.

4. Trust your instincts.
   If something doesn?t feel right, chances are it?s not. This is why investment newsletters like Wealth Daily exist: The editors at Wealth Daily do not get paid by pitching funds or stocks (like money managers). We get paid by the success of our investment ideas. If you make money from our ideas, you stay with us?? if you lose money, you leave us. Pure and simple.

   And finally...

5. If you?re going to speculate, go where the boom is.
   This one really is simple. As you know, we?ve been following the boom in the Bakken oil shale and the boom in the Marcellus for years. In fact, we were one of the first investment newsletters to bring this to your attention.

   Companies heavily involved in the Bakken are making money hand over fist ? and so are the shareholders of those respective companies.

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My parents have followed my rules to a "T."

Right now, they're heavily invested in the market. And every single investment they're in kicks off dividends and/or partnership distributions from REITs or MLPs. Every month, they collect a dividend/distribution check for a few thousand dollars.

Their house was paid off years ago, and they have no debt. So the dividends they collect every month more than cover their expenses?? with some money leftover to treat themselves to breakfast at Cracker Barrel.

One important fact about this: They don't need to touch their original principle capital.

The principle they have acts like an engine, doing all the hard work for my folks to live comfortably. They should be able to do this until the end.

Unfortunately, many Americans are dipping into their retirement funds to make car payments and mortgages and to buy food.

This is setting up a future crisis the U.S. government feels it needs to address...

More on that in next week's Wealth Daily.

Forever wealth,

Brian Hicks

Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Wealth Daily, Energy & Capital and the H & L Market Report. Known as the "original bull on America," Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor's page.

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Source: http://www.wealthdaily.com/articles/successful-investing/4057

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