Kevin O’Leary, the venture capitalist famous for his role on ABC’s Shark Tank, recently shared his investment strategy on LinkedIn, emphasizing the importance of cash-flowing investments in a well-balanced portfolio. O’Leary, also known as “Mr. Wonderful,” has revealed that the bulk of his family’s wealth is parked in ETFs, particularly those that focus on quality dividends and positive cash flow.
In his post, O’Leary stated, “A couple of years back, I sold my ETF company to Alps, the biggest ETF player in the States. It’s called O’Shares, and that’s where my family’s wealth is parked. OUSA is part of the S&P 500, cherry-picking the highest quality balance sheets with positive cash flow from around 100 out of the 500 names. Then there’s OUSM, which grabs the Russell 2000 and weeds out the underperformers – those companies not making any real dough.”
O’Leary’s emphasis on cash flow is a reminder that while high-risk, high-reward investments like those on Shark Tank or volatile assets like Bitcoin can be exciting, the foundation of a solid investment portfolio lies in steady, reliable income. “Forget Shark Tank, forget Bitcoin. Sure, I’ve got a 5% stake in Bitcoin and another 5% in gold, but the meat of my US portfolio? It’s in OUSA or OUSM,” O’Leary added.
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The ALPS O’Shares US Quality Dividend ETF (BATS:OUSA) and the ALPS O’Shares US Small-Cap Quality Dividend ETF (BATS:OUSM) are designed to provide investors with exposure to large-cap and small-cap dividend-paying companies that exhibit quality and low volatility. These ETFs aim to offer a balance of income and growth, with a focus on companies that have strong balance sheets and a history of dividend growth.
Adding Passive Income To Your Portfolio
For investors looking to add yield-producing assets to their portfolio, ETFs like OUSA and OUSM can be an attractive option. They offer the potential for steady income through dividends, as well as the opportunity for capital appreciation.
Investors can often find higher yields through alternative assets, which typically have a low correlation to the stock market. Here are two income-generating assets to consider adding to your portfolio.
Real Estate
Real estate can be an excellent source of passive income. Investing in properties, whether residential or commercial, can provide steady rental income alongside potential appreciation in value over time. For those interested in exploring private market real estate investment opportunities, Benzinga’s real estate offering screener has a curated list of offerings that cater to various investment preferences and goals. Minimum investments start at just $100 and options are available to both accredited and non-accredited investors.
Private Credit
In addition to real estate, private credit is an alternative investment option that can generate attractive yields. Real estate notes, in particular, allow investors to earn interest income by providing financing to property owners or buyers. These notes can offer a fixed return and serve as a diversification tool within an income-focused portfolio. These real estate notes allow anyone to start investing with as little as $500.
In an uncertain market, having a portion of your portfolio dedicated to cash-flowing investments can provide a measure of stability and help mitigate risk. While the allure of quick gains from speculative investments can be tempting, Kevin O’Leary’s investment strategy highlights the importance of having a strong foundation of cash-flowing assets. Whether it’s dividend stocks, ETFs, real estate or private credit, incorporating yield-producing investments into your portfolio can provide a steady stream of income and long-term financial security.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
