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TRUMP UNIVERSITY WEALTH BUILDING 101

strong earnings growth; and stocks that generate solid earnings growth and
sell at a relatively reasonable price.
A younger person might emphasize earnings growth while a new retiree
tilts toward value, yet both could also own investments in the middling growth-
at-a-reasonable-price category. The younger person may be more inclined to
invest in small-company stocks while the older one goes primarily with large
companies. Another way to increase potential returns or reduce risk is to
choose relatively aggressive or conservative vehicles, respectively, in a partic-
ular category.
Let’s talk a little bit about investing for income. This is harder than it
used to be. You see, interest rates—and therefore investment yields—fell from
the early 1980s until hitting bottom in 2003. Rates have since rebounded to
some degree, but they’re still relatively low. As I write this, the general rule is
that you can get 4.5 percent to 5 percent on your money at little or no risk,
and up to about 7 percent with more risk.
Until this general situation changes, in my view, the best solution for the
income-oriented investor is to follow a diversified income program . This pro-

gram provides the necessary dividends and interest from a variety of sources,
ranging from higher-yielding common stocks to preferred stocks to real estate
investment trusts to high-yield bonds to intermediate-term bonds to master
limited partnerships.
Also U.S. Treasury notes provide an ideal way to build a “ladder” of dif-

ferent maturities. This increases your flexibility and provides protection
against the risk of principal-depressing interest-rate increases. For instance,
you might buy notes maturing every year over the next seven, or in every
other year—such as 2008, 2010, and 2012. Whichever ladder you choose,
you can reinvest the proceeds from maturing T-notes each year or two years
in new notes at market rates. This will enable you to boost your income if
yields rise.

Investment Styles That Work for You

Now I’ll give you specifi c investments recommendations for each of fi ve dif-
ferent life situations. You’re probably in or close to one of them. First, though,
a caveat: Very few investments stay good forever. To reduce the risk that my
recommendations will already be out of date when you read this, I’m going to
focus exclusively on no-load mutual funds run by managers with excellent
long-term records. But check out the funds before you invest. Even if you

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