👉️ Guess Who’s Back, Back Again: Hint… The Market 🤫 

👉️ The 1% Rule: High-Risk Bets for Young Investors 💸 

👉️ My Risky Bets: Taking Back The Curtain 🫰 

👉️ Beehiiv: Start A Newsletter That Pays You to Write About Your Passions 📔 

Guess Who’s Back, Back Again

April 2025, the month when the S&P 500 fell by 19% from its peak after Trump imposed a 10% tariff on all imports and higher reciprocal tariffs on certain countries.

This marked the point when Wall Street analysts, who feared an economic slowdown, slashed their 2025 S&P 500 price targets, with some even predicting negative returns for the year.

Firms like Goldman Sachs, UBS, and HSBC (now RBC) cut forecasts significantly, due to potential corporate earnings declines.

However market optimism returned, when Trump paused harsher tariffs and a May 28, 2025 court ruling that questioned the legality of his actions.

The S&P 500 has since recovered to ~5,900, up 23% since its April low and up 0.74% YTD.

Due to the court ruling, analysts like Goldman Sachs and Yardeni Research raised their targets, showing increased optimism.

If we take a step back and zoom out through history, market volatility is part of the game. It’s the price of admission you pay if you want to invest in stocks. The market will typically experience a correction every 2.5 years and a bear market every 6 years.

Investors have seen 4 bear markets over the last 25 years alone, triggered by the bursting of the dot-com internet bubble in 2000, the global financial crisis in 2008, the COVID-19 pandemic in 2020, and the inflation surge in 2022.

The S&P 500 went on to make new record highs every single time.

My advice to you: 

Stay the course and focus on the long term goal. Take advantage of sell-offs in the market, they’re buying opportunities.

Don’t panic because of “noise”. And let me tell you… tariffs have been nothing but “noise”.

All of the panic, all of the fear, and all of the pessimism is overstated (in my opinion).

Fundamentally strong companies will always find a way to rebound from barriers in the market, like tariffs.

This is why why I decided to start The Profit Academy. To help you understand why you shouldn’t panic.

I do the analysis, I show you the intrinsic value and growth metrics, and I provide you with the stocks.

Our 5 stock portfolio is beating the S&P 500 by exactly 37.73% YTD.

But if your goal is to continue underperforming the market year after year, then skip to the next section.

If you want deep stock analysis, backed with strong conviction from someone who analyzes stocks in their free time (so you don’t have to) then click here and join premium, with free access to my community The Profit Academy.

All for less than what you’ll spend on your phone bill this month.

The price will double again when the next 25 members join.

The 1% Rule: High-Risk Bets for Young Investors

Welcome to this week’s Profit Zone free newsletter!

Today we’re diving into the 1% Rule.

A strategy by which young investors allocate 1% of their portfolios to speculative investments like cryptocurrencies or startups, helping to balance potential rewards with long-term stability.

Why the 1% Rule?

When you’re a young investor, you have something that older investors don’t have: time ⌛️ 

When you have time, you can experiment with higher-risk assets because if things go south, you have more time to recover. Plus, younger investors typically have less money, making financial mistakes less expensive.

The 1% Rule also offers a low-stakes way to learn the markets while you protect your core investments. Sometimes the greatest lessons are learned when you lose money. And losing money is always on the table when experimenting with riskier investments.

Historical Evidence - 1% Allocation

Historical data underscores the power of small, speculative bets.

Lets talk crypto for a second.

In 2013, Bitcoin traded around $100.

A $100 investment (1% of a $10,000 portfolio) would have bought you 1 Bitcoin at that time. That $100 would have grown to about $15,000 by 2017’s peak. In 4 years, you would have made ~14,900 off a $100 investment.

Of course these scenario’s are few and far between, but its interesting to see what a small 1% allocation can grow into if you find the right asset.

Venture capital offers another example.

In 2004, early Uber investors put in small sums via angel platforms.

A $1,000 stake (1% of a $100,000 portfolio) in Uber’s seed round yielded millions by its 2019 IPO.

Most startups fail, that’s no secret, but the 1% Rule ensures that those failures don’t wipe you out.

For example, During the dot-com bubble burst, investor losses were estimated to be around $5 trillion by 2002.

This loss was primarily due to the collapse of many internet-based companies and the quick decline of the Nasdaq index.

The Nasdaq saw close to a 77% drop, erasing a significant portion of its gains during the bubble's peak. Yikes.

How to Implement the 1% Rule

1. Set the Limit: Cap speculative bets at 1% of your portfolio. For a $20,000 portfolio, that’s $200. Don’t go over this. Set your limit and play within it.

2. Diversify the Slice: Spread your 1% across assets. For example: $100 in crypto and $100 in a small cap startup. Diversification also applies to riskier choices.

3. Research Thoroughly: Avoid hype-driven choices. That’s all I’ll say on that topic.

4. Protect the Core: Keep 80-90% in stable assets like ETFs, blue chip stocks or large cap stocks. If you have a strong base, it should help you sleep well at night. DO NOT allocate money to riskier assets without a solid foundation.

5. Learn from Outcomes: View losses as market education and lessons. Gains are just bonuses.

6. Lower Your Expectation: Don’t go into this thinking you’re going to become a millionaire overnight, because it won’t happen. If your expectation is too high, you’ll get crushed when reality doesn’t align with your goal.

My Risky Bets:

I’m an investor in my late 20’s and have a long time horizon (30+ years) so I’ve been implementing this 1% rule myself.

For me, my risky allocation is towards a crypto asset called Solana (yes, I also buy crypto, it’s called balance).

I hold about $2,500 amounting to ~11 coins.

If the value of Solana were to go to zero, it doesn’t wipe me out.

If the value were to 10x, I’d be one happy investor.

I don’t check the price on a daily basis because it would drive me crazy.

I just buy it, stake it (earn interest on my position) and forget about it.

If you’re a Canadian investor, you can buy these coins directly on Wealthsimple, a platform I use for all of my investments/high yield savings accounts.

Register here and get a free pair of AirPods if you transfer $25,000 or more. What a deal!

Until next week.

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
Follow me on Twitter, Instagram and LinkedIn

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