With the rise of the Internet, the individual investor with control of his or her own portfolio has been bombarded with hundreds of opinions from many “pseudo experts” who express their opinions.
Some like multi-billionaires David Tepper, Warren Buffett, and Leon Cooperman can be taken quite seriously. Unfortunately, the majority of folks speaking have not achieved financial independence through investing.
Some have made their money like Suze Orman, primarily through “selling advice.” Why else would you tell folks to buy mutual funds at Dow 13,000 but tell the same folks at Dow 7,000 that the market was too risky?
However, very few people have made their money timing the market. Take last week, for example — many pundits predicted the beginning of a massive U.S. stock market correction.
However, last week when I wrote my weekly blog, the S&P was at 1,273. I said the following: “Some recent headlines claimed that investors “lose” as stocks drop worldwide.”
As I said then, that just isn’t true. In fact, speculators lose when stocks drop worldwide.
Real investors benefit from the market’s fear. I have averaged more than 20 percent compounded annually in the past 11 years.
Real investors know there are short-term peaks and valleys.
He or she also knows that over time, choosing the right stocks at the right prices is paramount to success.
This morning as I write this, the S&P is up well over 3 percent in one week.
In fact, the entire gain in the S&P for 2011 was achieved in the six trading days from March 16 to today.
Ask yourself this question: When stores have specials they spend hundreds of millions of dollars to advertise them. But when the stock market offers the same bargains many speculators not only do not buy but worse yet they panic and sell everything.
Do you ditch your best friend because some stranger tells you that you should? Of course you don’t. Then why ditch your best investments?
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