A few “Great” Investment Tips!

Tip #1: Don't be misled by the rosy economic forecasts spewing from the mainstream media.
Consider the fact; they were totally BLINDSIDED by the Crash of 2008, not to mention the 1987 and the 2000 crashes!

Tip #2: Avoid the Financial Clutter
This tip is difficult to practice, simply because people are always giving you “financial advice”.
 
First, avoid following the masses: 
If most people are jumping into an investment, then it probably is time to get out of that investment.  You don’t want to be that person holding the rotten egg!

A good warning sign on “when to get out” is when you hear your friends and neighbors talking about how good an investment is. Especially if you are getting “investment advice” from people who have no business acting as if they are experts.

Warren Buffett, the wisest investor of our era, stated, “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

Second, avoid the misdirection from government:
Lots of certain U.S. government officials and so-called economic "experts" are crowing that the U.S. and global economies are about to rocket skyward.  Proclaiming that the Great Recession ended months ago, and we are now in the first stages of recovery.

But the sad fact is . . . Nothing Could Be Further From the Truth.

The government doesn’t necessarily outright lie; it just misleads people with specific economic reports. The classic example is unemployment.

When government statistics say that “unemployment” is at 5% . . . it actually is much higher.  The statistic you usually hear does NOT include those who have stopped looking for jobs, nor does it include those who took a lower paying job just to make ends meet (the underemployed).  When you look closer, the true unemployment number typically will double when other important factors are included.

When government statistics say that “inflation” is at 3% . . . it is much higher; probably 6% to 8%.  The inflation statistic you hear does NOT include the increases in food and gasoline prices.  If you have been grocery shopping or filled up your car’s gas tank lately, you know exactly what we mean.  When you take a closer look, the true rate of inflation is typically double of what the government is reporting.

But beyond the typical statistics you hear about, most of the time government officials simply don’t know what they are talking about.  The government doesn’t necessarily employ the best and the brightest, if for no other reasons, politics.

Here are a couple of examples:

•    Example 1: Ben Bernanke, the Federal Reserve chairman, stated on March 28, 2007: “At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”

Result:  The subprime mortgage problem continued to plague every financial market at record levels.

•    Example 2:  Rep. Barney Frank, D-Mass., stated on July 14, 2008: “Freddie Mac and Fannie Mae are fundamentally sound.  They’re not in danger of going under. . . I think they are in good shape going forward.”

Result:  Two months later, both Freddie Mac and Fannie Mae had to be bailed out with $100 billion . . . each.

•    Example 3:   The National Association of Realtors stated on Dec. 9, 2007: “Existing-Home Sales to Trend Up in 2008.”

Result:  2008 was one of the worst years on record for real estate.  Again, it’s not that the government outright lies.  It is often that government officials just don’t know what they are talking about.

Sadly the three examples above are not isolated cases, as they seem to be the norm.  This statement is not about politics, it is about reality and it is on display at every level.  Therefore, when it comes to government reports, we take them with a grain of salt.

Lastly, avoid the misdirection from so-called “financial experts”:  Most “financial experts” are either on the news or writing articles so they can get their name out there, or so they can hype their own company.  Watching these people spew out their financial opinions can be disturbing, and even a little sickening. 
•    Example 1: Jim Cramer, CNBC commentator, stated on March 11, 2008: “Buy Wachovia.”  
•    Result: Two weeks later, Wachovia came within hours of failure.  Wells Fargo bought the bank for pennies on the dollar.
•    Example 2: Jon Birger stated in Fortunes Investors Guide 2008: “Smart investors should buy [Merrill Lynch] stock before everyone else comes to their senses.”

•    Result: Merrill’s shares plummeted 77 percent and it had to be rescued by Bank of America through a deal the U.S. Treasury brokered.

•    Example 3: Elaine Garzarelli, president of Garzarelli Capital, stated, “Garzarelli is advising investors to buy some of the most beaten down stocks, including those of giant financial institutions, such as Lehman Brothers, Bear Stearns, and Merrill Lynch. . . Our indicators are extremely bullish.”

•    Result: None of these firms even exists today.  Lehman went bankrupt.  JPMorgan Chase bought Bear Stearns in a fire sale.  Merrill was sold to Bank of America at a rock-bottom price.  Imagine what would have happened to your portfolio had you followed their advice!

With everything that has gone on for the past few years, and is likely to continue; is there a better time or reason to investigate investments that are uncorrelated (not tied to the market), offer a predictable way to grow wealth, and feature the inevitable nature of a payout?

A large portion of the American public is SCREAMING for help while others are oblivious to what is going on around them.  In our opinion, we are obligated to share our story with both groups.

Imagine making money in 2012 - whether the market is up, down or flat . . . . . . 

    Is your financial plan working to your satisfaction?

    Is it fair to pay annual management fees when your portfolio loses money?

    Have you received a 12%+ return on your portfolio in each of the last six years?
        (if so, your portfolio doubled in value)

    Did your advisor have you out of the market during the in 2000 and 2008 meltdowns?

      If you answered NO to any of the above questions, your retirement plan, your advisor, or both may be deficient.  

How important is your ability to retire?  The next move is yours!