Friday, March 06, 2009
Chuck Cooper - How to Make a Small Fortune in the Stock Market
You may need this. The answer to the above is of course to start with a large fortune. Gordy is exactly right, as usual, in his investment approach. Now he tells us. And if you are one of those genius types who have been all in cash since the middle of 2007, you don't need any help. Just be sure you spread it around to fully insured accounts, or to money market accounts where "breaking the buck" means you only get back $.99. I could live with that.
But if you have been invested in just about anything, you may be wondering what happened to half of your capital. And what do you do now to a. get back your loses, or b. keep from losing the other half. For the first, my advice is to eat lots of fruits and vegetables, lose weight, no smoking of course, and be sure to take at least one drink of alcohol every day. The goal is to live long enough to see the markets come back. History, if you take a look at my previous post, shows it never takes much over ten years, and could be a lot quicker with all this stimulus package spending. From my lips to God's ears.
So what should you do in the meantime? Most experts advise not to panic and start selling your investments out of fear that they will go lower. No one knows whether we are close to a bottom or not. If it is just the flip of a coin, you might as well avoid the transaction cost. I think of investment shuffling the same way as switching lines in the grocery store, and you know how that works out.
That is not very helpful, so back to those folks that are in cash or near cash, or treasuries. You need to keep the funds safe, but now doesn't seem to be the time to be buying treasuries or anything long term. Interest rates are probably as low as they can get, and normally when agressive fiscal policy puts pile of cash into the system, the pressure is for rates to go up. For one thing, you would think the Chinese are getting tired of funding our deficits at a negative return. You don't have to be an expert to figure that if they ever stop buying, it is Katy bar the door.
Have a nice day.