Louis Navellier is an expert investor. Having studied a degree in business administration and an MBA in finance from the renowned California University, the man is keen on transforming theoretical investment principles into real-life profitable investments.
Louis Navallier emphasizes the need for a bottom-up investment principle, a theory relatable to the everyday citizen. His keen eye led him to become a contributor in international business media, such as CNBC and Bloomberg, and founding the Navellier and Associates company, a money management firm for individuals and businesses.
Louis Navellier Investment Theories
If you are new to investment, read Louis Navellier’s Growth investor review to get an insight into how people are successfully investing. Here are some theories he emphasizes to build wealth and why they work:
1. The Zigzag Theory
Navellier uses the zigzag principle as a safe means to earn a small profit. The zigzag theory allows the investor to spread risk by investing in two stocks that are not stable. He gives an example of NVR inc., a home-building company, and NVIDIA, a graphics-chip company. While the stocks for NVRinc are at the zig of the market, the NVIDIA stocks are usually at the zag. They quickly form the perfect mix and match to allow you to see small profits for each while spreading out the risk.
The zigzag theory allows investors to still get a good gain in the current oscillating markets, where volatility is typical. A stock example with high volatility would be QLOGIC, whose portfolio has been on both sides of the oscillation for a year.
Implementing the zigzag principle will give you an upper hand over the consumer-based market waves deemed unbeatable and have seen many drowning in floods of losses.
2. Investing in Market Leaders
Navellier is always keen to emphasize investing in the top dogs. He states that the previous year’s biggest winners are your best bet to making a profit on your investments. For him, Apple and Google stocks are the safest.
The man himself has been a direct beneficiary of sticking with market leaders as his emerging growth portfolio made a 17.8% gain in 2005.
Although market leader stocks are practically safe in the long run, it is imperative to understand that tech companies have weaknesses in the bear market. This is why Navellier emphasizes an investor’s ability to ride out heavy storms seen by some market leaders to see massive growth.
However, the Apple stock, AAL, is one of the few market leaders that have never entered the bear market and are, therefore, an encouraged investment stock to ride out the recession.
3. Investing Globally
Louis Navellier discusses the importance of investing globally, in non-US stocks. Note that the US has become a hub for investments due to keen technological growth. However, it is also happening in other parts of the world, and why not take the opportunity?
In recent years, investments in non-US stocks have massively increased. It has led to many non-US stocks becoming higher in value compared to US stocks.
The creation of the American Depository Receipts has also made it easier for US citizens to invest in non-US stocks. The ADR also publishes a list of high-value non-US stocks, and studies have also shown that non-US stocks listed on ADRs have a higher value than those not listed.
Louis Navellier also supports his global investing principle to make a profit with the internet. Louis Navellier reminisces about the difference between the 1980s when he started investing, and now.
There is a lot of information to munch on with the click of a button regarding stocks worldwide. The internet is undoubtedly a lifesaver when it comes to making the right choice in investment, and accessibility to financial advisers is closer than ever. So why not take advantage of the day and age we are in?
4. The GARP Optimization Model
This computer-based model allows an investor to grade stocks by their risks and rewards and then use a computerized system to rank them according to their GARP (growth at a reasonable price) percentage, cash flow percentage, and historical growth percentage. These numbers assist the investor in making a well-informed decision on the best stocks to invest in.
It is, however, necessary to understand that although this system works, it has weaknesses, and the market does not always turn as predicted due to external factors.
5. Investing in Inflation-Proof Stocks
Navellier recently published an article on his top pick markets to invest in that are inflation-proof. Although it is wise to invest in current trends during inflation, he understands the pain investors’ portfolios suffer due to the high prices.
The best stocks to invest in during inflation, according to Navellier, are food manufacturers and energy companies. He lists his top five companies, their current market value, and their dividend yield.
The CF industries, for instance, have a market value of $16.4 billion and a dividend yield of 1.9%. The company, a manufacturer of fertilizers, capitalizes on the concept of supply and demand, with the current demand being higher than supply, supporting an increase in sales and profit for stock.
Costco Wholesale, with a market value of $199.8 billion and a dividend yield of 0.8%, is another stellar investment. The company has been increasing its sales for thirteen years now, since 2010, and this is a good sign. Although the dividend yield may be small, long-term investors will yield big.
Devon Energy is also part of Louis Navellier’s list of inflation-proof stocks due to the spike in oil prices since 2021. The current setting has increased its dividend yield to 9%, which is way higher than the S&P 500 Index of 1.8%.
Other key inflation-proof stocks are the pilgrims-pride and photonics stocks, which are perfectly positioned for massive growth soon.
Final Thoughts
Louis Navellier is a very insightful veteran investor who regularly publishes newsletters regarding the current stock markets and makes predictions of the future. His newsletters prove insightful to both new and old stock investors.
Additionally, his contributions to the international media also provide great insights to investors. His money management firm is keen on making a profit for individuals and businesses with stellar outcomes. Use his wisdom, and you will surely make significant gains in the stock market.
