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Three Tips For Saving Your Portfolio --
and Sanity -- in a Bear Market |
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-- By
Amy Calistri |
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Still can't bear to look at your brokerage
account statement? You're not alone.
But it's time to start taking control of your portfolio
again. I promise you, it's not as overwhelming as you think. In
fact, it is far less painful than worrying, which is what you'll do
if those statements continue to sit at the bottom of your drawer.
And know that making even the simplest changes now can make a huge
difference in the long run.
(Full
Story Below) |
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Also in Today's
Issue... |
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With
Obama as President, Wind-Power Investors Are Seeing
the Green |
Obama wants to double clean-energy generation over the next 3
years. His stimulus plan includes $104 billion for
alternative-energy technologies. That spells enormous opportunity
for early investors -- because whenever Washington helps a new
industry get off the ground, the investment profits follow in
lockstep.
We saw it happen in biotechnology, nanotechnology and the
Internet. If you missed out on these government-fueled bonanzas of
the 1990s, don't feel bad... an instant replay is straight ahead.
Get the story here. |
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The
Ultimate Depression Survival Guide
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Sick of worrying about plunging home values ... sinking stocks ...
shrinking income ... and soaring job losses? Then grab hold of the
ultimate financial lifeline!
Inside the ground-breaking new guide from Martin D. Weiss: The
simple secrets, that can protect your savings, boost your income,
and make you wealthy even in the worst of times.
It's more than a book, it's a solution. |
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Three Tips For Saving Your Portfolio -- and Sanity -- in a Bear
Market
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If you ask investors
what their biggest challenge has been over the past year,
you'll probably hear about the recession, frozen credit
markets, dividend cuts, earnings declines, eroding consumer
spending, and more.
But I disagree. The biggest challenge for investors has
been staying engaged.
Heck. Tracking your portfolio in a bull market is fun.
And if you lose interest for a few months, chances are it
didn't cost you a dime. But staying engaged in a bear
market, can probably save you -- and possibly make you --
more money than you realize.
It's far easier, and less time-consuming, than you
think. In fact keeping it simple is what it's all about. You
don't need CNBC's Jim Cramer screaming from your TV all day
long. You don't need to do copious research and make
complicated charts and graphs. In fact, just taking it one
step at a time -- an hour or two each month -- is really all
it takes.
1. Minimizing Your Losses:
Setting Free Your Dogs
How many dogs do you have in your portfolio? Most
investors are pretty good at picking an investment. They
have good "buy-side" discipline. Companies are carefully
researched and carefully weighed against their potential.
But not every investment lives up to expectations. "Stuff"
happens. A new competitor or technology comes on the scene.
Economic conditions change. Whatever the reason, the
prospects for the company have changed and it's time to let
the investment go and move on to more profitable turf.
But the very same investors who were so rational and
unbiased when they picked the investment can't part with it.
They don't want to take the loss. Or they don't want to let
go of the idea of what the investment could have been.
Before long, they're holding on to more dogs than a kennel.
Not every investment is a winner. Don't take it
personally. Having a successful portfolio is as much about
minimizing your losses as maximizing your gains.
Do yourself a favor. This month, let just one of your
dogs go. It won't take you long to pick; you already know in
your heart of hearts which one it is. Trust me. It will be a
liberating experience.
2. Keep it Simple: Just One Idea
at a Time
Don't think you need find all the "cures" for your
portfolio in one marathon session. Even the thought of it is
overwhelming. You don't need to find 15 miracle investments
for your portfolio at one time, any more than you need to
deal with all your dogs at once. Sometimes all it takes is
just one good idea to keep your whole portfolio operating in
positive territory.
A single good idea can come from anywhere. It could
come from an investment analyst -- but keep your radar tuned
when you listen to the financial "talking heads." After all,
a lot of these analysts were the same ones predicting $250 a
barrel oil.
Good investment ideas can come from a news story on the
radio or a human interest story in a magazine. Maybe a few
of your friends mention a new hot product they're all
buying.
Sometimes a good idea is already "taken." For instance,
a couple of months ago, I heard people were buying more
guns. Gun stocks were already soaring on the news and
everybody beat me to it. When that happens, take the idea to
the next level. The stock prices of ammunition companies
hadn't budged yet.
My latest idea was inspired by a story about the
British pound hitting a 25-year low against the dollar. I
started wondering what companies would profit most by a
recovering pound. Before I knew it, I found a great British
company trading as an American Depository Receipt (ADR).
Before the end of this month, try to come up with just
one good idea.
3. If You Can't Find What You Like, Buy What You Hate
Sometimes it's hard to find an idea you like in a
bear market, especially surrounded by so much negative
sentiment. So work with what you hate most.
Do you still hate financial stocks and feel like the
current run-up is unwarranted? How much do you hate the
market overall? Or maybe you hate the idea that all this
bailout and stimulus money could devalue the U.S. dollar?
Right now, there is probably an investment specifically
designed for what you hate the most.
Short and ultra short exchange-traded funds (ETFs) are
as easy to buy as stocks and cheaper to own than a mutual
fund. There's an ETF that is designed to profit every time
the banking stocks tumble. Every day the S&P declines, you
can make money on an ETF that shorts the index.
As investors, we have so many more tools to deal with a
bear market than in the past. The only thing we have to do
is stay mentally engaged with the bear. But we can do it.
Just get rid of one dog and just pick one great idea
(or one you really, really hate) each month. And you'll be
well on your way to preserving your sanity and taking
control of your portfolio again.
Always Searching for the Next Great
Idea...
 
-- Amy Calistri
Chief Investment Strategist -- Stock of the Month
StreetAuthority Investor Update
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Worth Noting
China, the U.S. government's
biggest creditor, increased its purchases of American securities
in February just weeks before the country's officials questioned
whether such investments were safe.
While China?s purchases slowed and most were in short-term
Treasury bills, the country remained the largest foreign holder
of Treasuries after its holdings rose 0.6 percent to $744.2
billion, according to a monthly report released in Washington.
--
Bloomberg
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Who Cares if We're at a Bottom When You're
Pulling in $32,830 a Year in Dividends?
With the safe, growing, high-yield picks
that Editor Carla Pasternak recommends every month you don't have to
worry whether or not the market has bottomed. You can sit back and
collect annual dividend paychecks of $10,100, $19,400 or even
$32,830! You can't go wrong looking into Carla's recommendations. A year from now,
when you've collected as much as $32,830 from dividends alone you'll be glad
you did.
So take the first step and
read this
report now |
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