Tags: spetrino | investing | fear | facts

Don't Let Fear Distract You From the Facts

By Bill Spetrino   |   Friday, 30 Sep 2011 08:39 AM

Today will end the worst quarter in the U.S stock history in more than two years.

The S&P 500 has dropped more than 12 percent. Many folks who don't agree with me or want to see me fail have "enjoyed" watching what they believe is my demise.

They believe that investing in stocks is a sucker's game and will result in huge losses. __________________________________________________________

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Many have advised me to invest in gold or Treasurys, both of which have been in long-term bull markets. Just recently, a "friend" asked me how much I have lost during this meltdown. He was surprised when I told I haven't lost anything but, in fact, have "gained." My style of investing is based on building a "Dividend Machine."

In the past quarter, three of my largest holdings raised their annual dividend between 7.5 percent and 25 percent.

I told my "friend" that I didn't sell anything and I even bought some more stocks at bargain prices.

In fact, my largest holding didn't drop at all — and the next two highest dropped less than 4 percent. My overall portfolio is lower but is still higher than it was 15 months ago.

Not every stock dropped 12 percent. In fact, some of my Dividend Machine stocks actually rose in the past quarter while some lost more than 12 percent.

I have heard hundreds of reasons why this is a bad time to invest over the past 11 years and why anyone who takes "risks" is foolish.

I have heard that "optimists" like me just won't listen to "facts" and are acting foolishly.

In fact, the following facts are why I have been fully invested in stocks during the past 18 years.

I feel those people in cash are taking a bigger risk, Their anemic interest rate will be more than destroyed by inflation and a falling dollar.

In fact this is the best time to invest in the “right" stocks.

Want some proof?

The greatest investor ever, the $200 billion man Warren Buffett, recently said that on Aug. 8 he bought the most stocks in one day than he had all year. That was the day the S&P 500 was at its lowest.

Sir John Templeton also said the best time to invest is at "maximum pessimism."

For me, it’s relatively simple.

The last time the S&P dropped over 10 percent in a quarter was first quarter of 2009 when many felt the world was going to end.

In fact, the next two quarters were up over 15 percent and the two after that were up over 4 percent each.

So the investor who invested the day after the last more than 10 percent drop saw the S&P increase 46.55 percent in the next 12 months.

No one knows what will happen in the future but it all depends what set of "facts" you are considering.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now

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