Saturday, August 29, 2009

Keep Your Spouse in Line

Dear Investor's Daily Edge Member,

As a member of Investor's Daily Edge you've already gotten a full week of powerful, actionable advice that will change the way you grow and protect your wealth.

With Investment Director Bob Irish and his team of analysts you're learning to spot the trends behind the trends, where the world economy is really heading, and how to sort through the "bull" put out by the government, big business, and Wall Street.

And on Saturdays we continue that theme by giving you even more strategies, tips, and techniques for jumpstarting your wealth, as well as health and personal success, with the Michael Masterson Journal. The Journal is part of your subscription to Investor's Daily Edge. And it's totally free.

This is Early to Rise Founder and self-made multimillionaire Michael Masterson at his most off-the-cuff and direct. You'll get not only his no holds barred guidance and counsel, but first crack at his latest breakthrough business ideas and marketing strategies. He gives you both specific recommendations in the world of business and investing and in-depth explorations of economic issues. And when he spots something that can improve your well-being – he'll write about it.

If a myth needs busting, Michael is there… if the Wall Street Journal got it wrong, he'll expose it… if the Fed needs to be knocked down a peg, he'll be ready… and if there is something you should be doing right now to accelerate your success, Michael will tell you about it.

The Michael Masterson Journal will arrive in your inbox each Saturday. Don't miss it!



MaryEllen Tribby
Publisher and CEO, Investor's Daily Edge


MM Journal

Saturday - August 29, 2009  

Women tend to be less aggressive investors than men, a new study says. But on a risk-adjusted basis, their performance outdoes that of men by one percentage point annually.

The reason? Women trade less frequently, buy more conservative stocks, and have lower expectations. In an article about the study in The New York Times, Jason Zweig suggested it's because men are primarily interested in return on investment. Women make safety their top priority.

"There is plenty of evidence to support this," Zweig says. "Women are more inclined than men to wear seatbelts, avoid cigarette smoking, floss and brush their teeth, and get their blood pressure checked. They are also 40 percent less prone than men to run red lights."

His conclusion is that men should turn over investment decisions to their wives. Or at least share the decision-making with them.

I have been doing something similar. I've been discussing my investment decisions with my wife before I make them. And I've found it to be a good thing. Most of the time.

She is, as the study suggests, a conservative investor. She prefers bonds over stocks and doesn't like any investment she doesn't understand.

I'm a conservative investor too, so it is seldom that we disagree. But I benefit from these discussions with her because it reminds me that, for our financial goals, the return of our capital is more important than the return on it.

Still, we don't treat investing as a co-equal endeavor. I make the final decisions after talking to her. That puts the burden of due diligence on me.

In many other areas the roles are reversed. When it comes to raising our children, for example, I play the role of advisor and she acts as CEO.

Studies have shown that couples -- married or not -- create more per-person wealth than individuals working solo. If you are making all the investment decisions yourself, you should definitely consider a junior partner.

Longtime readers of IDE got most of their money out of Wall Street before the "crisis." And now, though some of us are thinking about getting back in, there are other investments that look a lot better. Real estate, gold, commodities, currency trading, natural resources, and many other "off the Street" investments are making solid gains.

Timing, as always, is everything. Luckily there is a service that gives you access to markets you never knew much about, with up-to-the-minute advice you can act on immediately.

Click here to find out more.

Someone sent me a magazine article about "what motivates kids to buy."

MTV Networks asked a group of young adults how they make purchasing decisions. The author of the article was surprised at the results.

The respondents, aged 18 to 24, said the thing that most influences their buying decisions is "good quality." Next on the list was "trustworthiness." And, finally, "workability."

The writer of the article said these findings were "revolutionary." Manufacturers and marketers should "pay attention" to the study, he said, and start emphasizing these characteristics in their ads.

That would be idiotic.

Surveys can't tell you anything about why customers buy what they buy. What surveys do is indicate what customers want you to believe -- or what they want to believe about themselves.

This particular survey used a multiple-choice format. That is the least reliable of all the unreliable methodologies. Multiple-choice surveys spoon-feed participants fabricated answers.

You don't have to be a marketing genius to know that.

Imagine a teacher giving little Johnny multiple choices for why he failed to bring in his homework. "Johnny, tell me the truth. Were you too lazy to do it? Or did the dog eat it?"

Imagine a woman discovering lipstick on her husband's collar asking him: "Is this from your mistress? Your mother? Or did the laundry give you the wrong shirt?"

Is it any wonder that two out of three participants in the MTV survey claimed their buying decisions were based on product quality instead of on "what's cool" or "what my friends think"?

Never, ever invest in a product that has been inspired by the results of a focus group or customer survey. Never, ever believe the myth that if you want to know what to sell your customers, "all you have to do is ask them what they want."

When people ask me "What's the best way to make money?" I usually tell them to start an online business.

Last year, while brick-and-mortar operations and big-name retailers were dropping like flies, Internet-based ventures were up 7 percent, according to trade publication Internet Retailer. The Internet is already a $133 billion market and its future is bright.

If you've been thinking about starting an online business, you should check out a new program ETR has created with veteran copywriter and marketing consultant Bob Bly. Bob and the team at Early to Rise have put together a quick-start action guide for Internet newbies. It's based on techniques -- from proven copywriting secrets to the latest trends in online ads -- that Bob has discovered over his 30-year career.

I've never read a book written by Bob that I haven't enjoyed. I've never heard him give a speech that I didn't learn something from. I'm confident that this program will be jam-packed with useful advice, as well as entertaining and easy to follow. I recommend it to you.

And you can start on it today.

I've said before that eventually there will be only three newspapers in the USA: The Wall Street Journal, The New York Times, and USA Today.

Why? Because of two trends:

1. General advertising (ads for cars, perfume, cigarettes, etc.) has been in a long-term downtrend. And with the Great Recession, that downtrend has become a tail-spinning dive.

2. News reporting in print is outdated. The Internet has seen to that.

The only print publications that will survive will be those that provide not just reliable information but a unique and compelling perspective.

The Wall Street Journal and The New York Times are the best-written newspapers in the country. And both will survive because they represent two significant but different readerships: The NYT represents intelligent liberals. The WSF represents intelligent conservatives. (I like both!)

USA Today is pitched to Middle America. That is a big crowd, but a tough market to serve. The reason I think it will survive is because the people behind it have been very clever about how they do their job.

For one thing, USA Today is on top of U.S. culture.

Examples: It was the first national paper to cover the Internet boom, natural health, and mixed-martial arts in any depth. (Just recently I noticed the results of a MMA championship contest on page one. That is astonishing.)

For another thing, they have become competent direct marketers.

Example: Michael Jackson was not even buried when USA Today published the first half-page ads selling its own MJ memorabilia. I bet they pulled in a half-million dollars in profit off that one campaign.

The Take-Away: If you are an information publisher, you need to have a unique perspective and you need to master direct marketing.

"What would you say is the perfect investment newsletter from the perspective of a subscriber?"

A very experienced newsletter publisher asked me this recently. He wasn't looking for the obvious answers: cutting-edge ideas, emotional relevance, actionable advice, etc. He was looking for something more fundamental.

This was my answer: "The ideal newsletter makes the subscriber feel exactly the way he did the moment he subscribed ... every time he reads it."

"It's like the ideal spouse," I explained. "He or she always makes you feel the way you did the moment you in love."

This way of looking at "perfection" can be applied to almost every business and every product.

I mostly got out of stock investing last year -- before the market crashed.

I might look a bit closer into re-entering the market some time this year. But my primary investments will remain small businesses and real estate.

It will be entrepreneurs like me -- true wealth creators who give people jobs and pay taxes -- who will drive economic recovery. Government accounting tricks won't work.

If you don't yet have your own business, now is the best time ever to start one. Why? Because the Internet provides a growing market, and new businesses are bolstered in growing markets.

The advantage of Internet marketing won't last long. Every month, hundreds -- no, thousands -- of companies are joining the game. Ninety-five percent of them won't succeed because they don't understand what makes Internet marketing work. But you do -- or you can learn -- by reading ETR, investing in one of our Internet marketing programs, and, most of all, by attending our annual Bootcamp this November.

"The Best Investment I Have Made"

An IDE reader has some kind words for our own Steve McDonald:

"Your program, The Bond Trader, has resulted in the greatest increase, by far, in the value of my accounts, although I still have substantial (for me) amounts in stocks, both domestic and foreign.

"I consider The Bond Trader membership cost the best investment I have made in 20 years of getting investment advice from many different sources!"


[Ed. Note: Michael Masterson welcomes your questions and comments. Send him a message at]

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