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.
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This article ‘Forget Shark Tank, Forget Bitcoin’ Kevin O’Leary Says The Real ‘Meat’ Of His Portfolio Is In These Cash Flowing Investments originally appeared on Benzinga.com
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