It's Friday, which means it's time to rip open the Rich Retirement Letter mailbag.

I love getting your feedback, answering your questions and pondering your responses to our content.

So please keep the questions and comments coming! Send me an email any time and I promise I'll read every email I get.

Today, I wanted to start with a question from Dwayne B who asks:

“What do you think is the best way to utilize the information regarding refinery stocks and ‘...look for down days in oil and refineries… Never chase momentum?’ as well as the home builder stocks, to profit from trading options?”

Wall Street is full of pithy words of wisdom like Dwayne's quote from my colleague Byron King — "never chase momentum."

Sometimes these statements can sound like a Yogi Berra quote.

In fact, Yogi's famous stock market quote goes something like this... "Buy a stock. If it goes up, sell it. If it goes down, don't buy it."

Let's take a look at some of these axioms and see if they can help you build your wealth!

The Wall Street Sayings That Are Worth Remembering

I think the most important thing to remember with statements like "never chase momentum" is to put the phrases into context.

Chasing momentum in this case means buying after a stock has had a huge run.

As investors, we never want to pay top dollar for our shares. But it's also important to remember that momentum can keep going — and lead to much larger gains over time.

So for refiners (and homebuilders and other hot areas of the market), I'd watch for stocks that are starting to move in the right direction and buy those names.

And then when a stock (or an entire area) has been moving higher for some time, it's probably better to wait for pullbacks to add to your positions.

Other good Wall Street phrases to remember include:

Sell to the sound of cannons, buy to the sound of trumpets. In other words, buy when other traders are pessimistic and you're getting a great deal. And sell when stocks are flying higher (and may be vulnerable to a pullback).

The market can stay irrational longer than you can stay solvent. When you do a lot of research, it's easy to say that the market is "wrong" and a stock should be trading much higher or lower. But remember, just because a stock should trade at a certain level doesn't mean it is going to move to that price right away.

There are old traders, and there are bold traders, but there are no old bold traders. It can be exciting to take big bold trades, risking a large portion of your wealth on a speculative opportunity. But this style of trading eventually leads to ruin as one or two big losses will wipe you out. Better to take a balanced approach, investing small amounts in speculative trades, and larger amounts in strategies that pay off consistently.

Don't be a "d**k" for a tick! This is one that my co-worker at the hedge fund used a lot. We always used limit orders to get the best price we could for specific trades. But if a limit order wasn't hit, he would adjust the order. That way he didn't miss a 100% move in a stock simply because he wasn't willing to pay an extra 25 cents to purchase the shares.

There are plenty of other great sayings that can stick in your head and serve as reminders to make smart decisions.

If you want to share some of your personal favorites, please send me an email!

Rising Home Prices and the Wealth Effect

As home prices continue to surge across the country, T. in Texas writes in with some important thoughts...

“Zach, How do you figure higher home values give consumers MORE money to spend? Are you expecting everyone to take out loans against their increased home equity values?

I have been in the home I built myself at the age of 25. It has gone up 10-fold in value in 30 years. Yet I have ZERO extra money to spend since my real estate taxes and insurance are also up about 1000% in 30 years. So I actually have even LESS money to spend as a consumer.

The only way rising home values help the consumer is to SELL and then DOWNSIZE and pocket the difference. Or move from California to Texas, or New York to Florida,  and pocket that difference.”

You've got a point, T. And higher home prices do come with challenges and drawbacks.

Frankly, your decision not to take some equity out of your home isn’t the decision that most other homeowners are making.

For better or worse, low interest rates and rising equity values give homeowners an incentive to refinance or take on new mortgages.

Cash from these transactions will show up in our economy in different ways.

Some will be spent — and that's a big part of why I expect key retail stocks to do well.

Some will be invested in the market — so we can expect stock prices to remain somewhat rich as this capital helps to support valuations.

Even when consumers decide not to pull cash from their equity, there's still a confidence factor.

If I know that I have $500,000 of equity in my home, I'll be more likely to spend extra cash from my job or my savings because I know that there’s extra wealth in the value of my home.

Please understand I'm not taking issue with the financial decisions that you’re making, T. It may be wise for you to decide not to tap into your home equity.

But as an investor, I need to look at what other consumers will do and how those decisions will affect the economy and the stocks that I'm investing in.

Success Stories From Blackstone

Last week, we took a look at shares of The Blackstone Group (BX) and I asked you to share your success stories with this stock.

I truly enjoy hearing about your investment successes!

I smile every time I hear that you're doing well in the market and growing your wealth so you have the time and resources to focus on the things that really matter.

So thanks for writing in — and please keep the emails coming!

Here are just a few of the responses I received...

“Hi Zach, I followed your recommendation and bought BX November 26, after wait that the 50 SMA crosses over 100 SMA. So far, I'm up about 86% without considering dividends. I put a trailing stop loss at 4 ATR or when 50 SMA crosses under 100 DMA. Until then, I´ll let it run!! Thanks a lot. I really appreciate everything you do for us. JH”

“Hi Zach, I now know why The Blackstone Group is one of your favorite companies; it has become my favorite too. I just got into the Market in 2018, and I don't recall if it was based on your recommendation, but BX was one of my first purchases. I couldn't believe how it took off compared to my other early acquisitions. As I'm sure you know, it took a dip in the crash of 3/20, but I took advantage of the dip to buy more shares. As of Friday, it's up 155%. Keep up the great work! And if you have any more favorites you'd care to share, I'm all ears. — Dale P.”

“Hi Zach, Looks like I first starting getting BX in 2016.  Have been getting regular dividends ever since.  Now, my BX position is up 220%. Thanks, Simon -- PS.  Hope you're still flying.  I never see you write about it anymore.”

Congrats on the great profits, guys!

Dale, we'll certainly do our best to keep the "favorites" coming. The market is full of great investment opportunities and our goal is to share as many of them as possible with our Rich Retirement Letter community.

Simon, I'm still flying and enjoy every chance I have to take friends and family up for a ride.

I haven't written about it as much because I didn't want to bore you with my own personal pictures and experiences.

But next time I head up, I'll take some pictures and share them with you all!

I Just Retired... Now What?

It seems like every week I get at least two or three emails like the one from Tim below:

“Zach, I just retired from the Federal Government. My 401 k account is still invested in the TSP. I am looking to appreciate the money I saved with taking some yearly to supplement my income. Looking for some direction for the future to secure and grow my retirement account. Thanks, Tim H.”

Congratulations on your retirement, Tim! And here's to many years of enjoying more free time.

While we can't give individual investment or financial advice here at Rich Retirement Letter, our mission here is to help people just like you along the journey of retirement.

With so many great opportunities in the market today, I encourage retirees to start investing some of their wealth on their own.

Buying shares of stable, profit-generating companies that pay dividends is a great way to grow your wealth in today's economy.

Every week, we talk about stocks that fit into this category. So if you're just getting started, it's a good idea to review recent articles to get an idea of which stocks to start buying.

Once you are comfortable with investing in individual stocks, you may want to consider adding some other tools to your investing approach.

Strategies like selling put contracts to generate income or buying speculative option contracts with a small portion of your wealth can help to accelerate your gains and leave you with more to spend for retirement.

Keep in mind, the most important thing is to protect your wealth so that you can continue to enjoy these golden years that you've worked so hard to prepare for.

That's all for today. I hope you have a wonderful weekend!

Here's to living a Rich Retirement,

Zach Scheidt
Editor, Rich Retirement Letter
RichRetirementFeedback@StPaulResearch.com