Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Four Ways to Profit in Any Market

By

Many investors have dropped their guard, relieved that the worst is behind us. Don't believe it.

PrintPRINT
Editor's Note: See more from Keith Fitz-Gerald on Money Morning.


When it comes to the global financial crisis, many so-called "experts" think the worst is behind us. But I don't buy it.

And I'm not alone.

Just look at what some other big-name investors -- each also known for their independent thinking -- are saying or doing right now:

  • Bond king Bill Gross is nervous and raising cash.

  • Author, commentator, and global-markets guru Jim Rogers has repeatedly said that he's not investing in stocks anywhere in the world right now.

  • Hedge-fund heavyweight John Paulson is moving aggressively into gold.

  • And investing icon Warren Buffett -- never one known for tipping his hand -- is candidly stating that the US financial-crisis cleanup is far from complete. The fact that he's reportedly buying more shares of Korean steel dynamo Posco (PKX) would punctuate this point.


Indeed, entire nations -- I'm thinking specifically of China, India, Brazil, Chile, and one or two others -- are adopting similar stances. And they're doing so for the same risk-fearing reasons. They want to grow their money but they don't want to place it at risk any more than we do.

This kind of uncertainty can be paralyzing, making it tough to decide where -- or even if -- we should deploy our investments.

Fortunately, we've been here before. And what we learned will allow us to profit no matter what the financial future holds for the US marketplace.

Using Past Losses to Zero in on Future Profits

A decade ago, in the middle of the euphoric ardor of the dot-com bubble, I warned that we were following in Japan's footsteps and risking a repeat of that country's "Lost Decade." A balanced approach to investing was the key to success, I said, and value and dividends would win out over growth in the decade to come.

The US stock market had become a giant casino -- but one in which everybody won -- so my warnings were ignored, and even ridiculed, by the "tech-savvy" investing set, whose members said I was out of step with the Brave New World of the World Wide Web. Never mind the fact that I have lived in Japan and spent nearly 20 years in Asia.

We all know how this turned out.

In 1999, if you'd followed the masses and invested $100,000 in the Standard & Poor's 500 Index, you'd have incurred an average annual loss of 1.1% -- leaving you with only $89,000 for 10 years of work.

Had you taken that same $100,000, and invested it using a simple stock/bond split (60% in stocks and 40% in bonds) -- maintaining that ratio by rebalancing the portfolio every December 31 -- you'd have reaped an average annual return of 4.3% for that same 10-year stretch and ended the decade with $300,500, according to a recent study by The Vanguard Group Inc.

There's a message here. Not only is it very clear, but it's one we repeat frequently: Successful investing isn't about "buy and hold" -- it's about "buy and manage."

< Previous
No positions in stocks mentioned.
Fifteen trades. All profitable. Since launching his Geiger Index trading service late last year, Money Morning Investment Director Keith Fitz-Gerald is a perfect 15 for 15, meaning he's closed every single one of his trades at a profit. And he did this during one of the most volatile periods for the U.S. stock market since the Great Depression. Fitz-Gerald says the ongoing financial crisis has changed the investing game forever, and has created a completely new set of rules that investors must understand to survive and profit in this new era. Check out our latest insights on these new rules, this new market environment, and this new service, the Geiger Index.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE