July 12, 2008

Been a Long Time......

I know it's been a long time. What's someone to do when there's only so many ways that I can continue to tell investors to conserve cash and stay on the sidelines? So why am I writing now? Well, something has changed. I'm detecting panic and desperation and investors actually throwing in the towel and leaving the market in disgust. This is an important tell because at market extremes - the crowd is usually wrong (the crowd is actually usually right at most other times). So what am I looking for? I don't know. We could get a wash-out where the market washes out the last holders-on. But there are lots of investors just like me (on the sidelines waiting for this event) which decreases the likelihood of this happening. Probably, a little more likely is that the market's volume just dries up though and the market then starts rallying. Nothing spectacular, mind you. Just some days where the market slowly starts ambling up. What sectors should do well? Historically, coming out of a bear market, the sectors that do well are the ones that are already doing well - energy, commodities, agriculture AND the sectors that have been doing the worst - financials, real estate and homebuilders. From the best performing sectors, you can pick names out of Investors Business Daily, or just invest in the ETF's to avoid the exposure of a single company getting hit with bad news. I'd go the ETF route. If you have not already noticed my comprehensive ETF Locator, take this opportunity to familiarize yourself with it. Posted on March 14, 2008 at 5:04 PM on this blog. Good Luck.

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