6 Reasons Why NOW is the Time of Your Life to Invest

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September 9, 2009

"Everybody wants to go to heaven, nobody wants to die" This quote, attributed to the boxer Joe Louis, has a corollary in the investment world: Everyone wants to be make money – but few people are willing to invest in their financial education. They read reports generated by investment banks. They listen to their brokers. But they don't take the time to find in-depth, reliable investment advice. And why not? There is a wonderful story about an old dog that lay stretched out on the porch of a country general store, moaning and growling as he lay half asleep in the sun. "Why is your dog making all those noises?" a customer asked the store owner. "Oh," answered the owner, "he's lying on a nail." "Well then," said the customer, "why doesn't he move?" "Because," said the owner, "it's not hurting him bad enough." Daniel Johnston, in his book Lessons in Living, calls this condition "comfortable misery." It means you're miserable, but you're used to it and can tolerate it. That's the condition many investors find themselves in today. They are hurting but they are not, apparently, hurting enough to change. Jon Herring tells me that a significant number of IDE readers don't subscribe to a single IDE newsletter. They are content, it seems, to read our views on the economy but they aren't ready to start taking advantage of our investment advice. If you want meaningful change in your life, you must take responsibility for the situation you find yourself in and then take action to change things. A recent conversation with a friend of mine might shed some light on the subject. He said that he has "been meaning" to start investing again, but he just can't seem to get himself moving. The old "meaning to." Consider this ditty by an anonymous poet. Mr. Meant-to has a comrade, And his name is Didn't-do Have you ever chanced to meet him? Did he ever call on you? These two fellows live together in the house of Never-win, And I'm told that it is haunted by the ghost of Might-have-been. How a Starving Peasant Went From Living at the YMCA to a Net Worth of Over $8.2 Million Ted P. was $40K in debt. He had to get a loan so he could eat. Now, with a net worth of over $8 million, Ted has agreed to share the powerful secret that helped him amass a fortune. Maybe you're still licking your wounds? Many investors are stuck in grief, mourning their bear market losses and waiting for a signal to buy. Others are kicking themselves for missing the rally that began in March. And all the while, IDE's private services have been racking up profits left and right. In the last year, Steve McDonald has recommended 65 corporate bonds to subscribers of The Bond Trader. During that time, he has taken only one loss – 15%. He has closed positions with capital gains as high as 90%. And the current portfolio has an average annual return of 13% and an income stream of more than 6%. Not bad during the worst market crash since the thirties. Rusty McDougal's bread and butter are precious metals and energy stocks and small resource exploration companies. In the last year, 15 out of 17 recommendations Rusty has made have gained value, including winners of 267%... 130%... and 108%. If you'd rather opt for the quick profits that options can bring, Ted Peroulakis is your man. In his Options Power Trader service, Ted has closed four +100% winners in the last 60 days. No matter what happens in the markets, there is always money to be made by those who are prepared and willing to take intelligent risk. I once saw an interesting psychological study about the "seven stages of grief" that people go through when dealing with the loss of a loved one. I've adapted it for investors. If you find yourself mourning your investments, you might be interested in pinpointing what stage you are in... Shock and denial – You reacted to your losses with disbelief. You felt frozen. You didn't know what to do. So you did nothing. Pain and guilt – As the shock wears off it is replaced by pain. You realized that your losses were real. And that made you feel guilty. You beat yourself up about what you "should have done." Anger and blame – You lashed out and blamed others. And there were plenty of people to blame. Depression – True magnitude of your loss hits you. You feel emotionally devastated. You may have said, "I'll never invest again." The upward turn – As you adjust to your new reality you see that there are still opportunities. Other people are making money. You think, "If they can do it, maybe I can too." Reconstruction – You identify a realistic and practical course of action. You study the market. You find the motivation building up. Resurrection – You take action. Immediately you feel a sense of hope. You are excited about the new opportunities. You make some smart moves. You've got your mojo back. Where are you on this grief continuum?  Figure that out and then make a commitment to get back on track. How Would You Like to Pull the Handle on a $942,300 Jackpot? Investing expert Russell McDougal has developed a strategy to take an ordinary rise in two common resources… And turn it into an extraordinary fortune. (He turned $6,300 into a $167,460 windfall!) Now he wants you to see what kinds of gains are possible for YOU. If you have a perspective longer than the next few years, here are six reasons why I believe now is the best time of your life to begin investing again. Never before in history have we seen such explosive growth of the middle class worldwide. This means brand new markets everywhere, for everything from mouthwash to microprocessors. History shows that returns are much higher for a portfolio formed midway in a recession than one formed midway in a recovery. Big flows will return to stocks and bonds. The amount of cash on the sidelines is staggering! Over $3.6 trillion is invested in money market mutual funds. How long will earning next to nothing look attractive? Despite the market run up since March, the number of takeovers is rising, which means market pros are seeing good value in select companies. Corporate bond yields are generous, especially relative to treasuries Dividends, which are responsible for half the long term return of the market, are very attractive in certain companies. Steve Sjuggerud is one of the world's most widely read investment newsletter writers. He agrees with this longer-term bullish perspective… In a recent issue of his newsletter, True Wealth, Steve writes, "Stocks just went through their worst 10-year period in history. Every losing 10-year period has been followed by an exceptional 10-year period." That's good to know, if you're a long-term investor. "You don't want to buy in 1999 after the greatest 10 years in history. You want to buy in 2009, after the worst 10 years in history." By no means are we suggesting that you go "all-in" right now. The market has just made a historical run to the upside. A pullback – possibly a sharp one – is likely. But that shouldn't scare you. It should excite you, because values – once again – will abound. Avoid the weaker names. Be highly selective in the stocks you buy and average into your positions over time. Use trailing stops to protect your gains. And be ready to pounce when values present themselves – 10 years from now, you will be very glad you did. Good Investing, Bob Irish Investment Director Investor's Daily Edge We want your feedback! Let us know your thoughts on this article. Email us at Email: feedback@investorsdailyedge.com Market Window FINANCIAL ADVISORY BOARD Bob Irish - Investment Director Andy Gordon - Editorial Contributor Jon Herring - Editorial Director Ted Peroulakis - Editorial Contributor Christian Hill - Managing Editor Dr. Russell McDougal - Editorial Contributor Steve McDonald - Editorial Contributor Michael Masterson - Consulting Editor

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