Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How to Make Money No Matter What the Stock Market Does

InvestorEducation / Learning to Invest Oct 31, 2012 - 08:00 AM GMT

By: Investment_U

InvestorEducation

Best Financial Markets Analysis ArticleMarc Lichtenfeld writes: This weekend, I was at a boxing match, talking with someone affiliated with the show. He used to work on Wall Street. I asked him if he missed it. “Hell, no,” he said quickly. “Wall Street makes boxing look like an honest business.”

After the financial collapse, flash crash and various scandals, that’s the way many people view Wall Street.

And that’s despite the current bull market being the ninth longest in history – out of 26.


From its lowest point to its peak, this bull market was up 121%. After the recent sell-off, we’re currently up 118%. That makes the current market the seventh-strongest market in terms of gains.

In an excellent Wall Street Daily article, my colleague Louis Basenese points out that of the eight longer bulls, the second half of the bull market equaled or topped the performance of the first half in five of them.

Yet, according to AAII’s Investor Sentiment Survey, only 29.2% of investors are bullish while 43.1% are bearish. The long-term average is 39% bullish and 30% bearish.

So despite being in one of the top 10 strongest markets in history, investors aren’t buying it (figuratively and literally). In fact, the average investor’s timing has been nothing short of abysmal.

Investors have taken money out of equity mutual funds for 17 consecutive months. In September, the industry saw nearly $14-billion worth of funds redeemed, despite the market making new bull market highs in six of those 17 months.

Just like I advocate betting against Wall Street’s sell-side analysts, I also recommend fading (betting against) the general public. As long as there is so much fear out there, the market should go higher…

Fear of the Unknown
I understand the fear – there’s a lot to be fearful about. We’re either about to elect a President who’s a Kenyan Marxist Terrorist who hates America or a Flip-Flopping, Woman-Hating, Silver Spoon Born “One-Percenter,” who’s the puppet of billionaire businessmen.

Then, of course, there’s Europe (which will surely collapse), impossibly low interest rates that will soon make the Zimbabwean dollar look stable compared to the greenback and a nuclear-armed Iran whose leaders can’t wait to let the missiles fly so they can be in the loving arms of 72 brown-eyed virgins.

The problems are real. And there will be new ones rearing their ugly heads soon.

But the world has always had problems. Ten years ago, we were in the midst of the worst bear market in history, one that saw the stock market get cut in half. There was fear that the economy was slowing. (Isn’t there always?) We were still licking our wounds from 9/11 and getting ready to invade Iraq in a war that was as unpopular as Vietnam.

Despite those serious issues, the market is up 59.4% during those years – which also included another nasty bear market and a near financial meltdown. Not bad considering.

How to Play it Safely
If you’re concerned about the market, but also see the intelligence of going against the crowd, consider Perpetual Dividend Raisers – stocks that raise their dividends every year.

Now, many “experts” will tell you these stocks are overvalued, because they’ve been hot for a while. But if you’re investing for the long term, Perpetual Dividend Raisers typically go up more in bull markets and go down less in bear markets than the broader indices.

For example, since the 10-year period ending in 2002 – not including dividends, just share price appreciation – the market has risen an average of 71% over 10 years (1993-2002, 1994-2003, etc.). That comes out to an average annual growth rate of 5.5%.

Dividend Aristocrats, stocks that have raised their dividends every year for 25 years, climbed 103% or 7.29% annually.

When you include dividends, the market returned an average of 96% over 10 years or an average of 6.98% annually versus the Aristocrats return of 162%, or 10.11%.

That 10.11% figure incorporates at least one bear market and in many cases two, in each variable in the calculation. I’m sure most investors would be satisfied with earning an average of double digits annually on their long-term money especially after weathering a vicious bear market or two.

A 10.11% compound annual growth rate doubles your money in just over seven years. It triples your investment in just over 11 years.

Avoid Trying to Time the Market
The point is, don’t try to time the market. There are problems in the world. There are crooks on Wall Street, but that shouldn’t stop you from investing to reach your goals. Just like you don’t let the fact that you could get hit by a bus crossing the street stop you from going about your daily activities.

If you’re invested for the long term (especially if you’re invested in Perpetual Dividend Raisers) and don’t give your money to suspicious characters to manage for you, you’ll be fine.

When the general public is afraid of Wall Street, that’s the time to be invested. You’ll be selling your shares to them at higher prices when they come back in droves.

Source : http://www.investmentu.com/2012/October/make-money-no-matter-what-the-market-does.html

Marc Lichtenfeld

Editor’s Note: But what if you don’t have the time to put together a stock watchlist for yourself, or don’t even know where to look? That’s where The Oxford Club comes in. We’ll do the work for you, showing you what stocks to buy and when to buy them. Not only that, the Club offers something for every investor – from stock market newcomers to seasoned veterans – and provides ample opportunity to diversify through several model portfolios. Take a look at the full list of benefits that you’ll receive when you become a member of The Oxford Club.

Copyright © 1999 - 2008 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in