Here is the funny thing about investing: People do not use the principles they use in day-to-day life that they do when buying stocks and investments.

For instance, say you go to the store to buy a big screen TV. What do you want? You want a quality brand that is on sale. If you see a Sony or Samsung TV for 50 percent off, you know you are getting a deal.

However, in investing, people just want to chase the next hot thing. Look at how people fleed, or should I say were fleeced in, the Facebook initial public offering, which dropped 50 percent in the months that followed. Look at the housing and Internet bubbles. Again, people were chasing the next hot stock or trend.

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What you want to do is find sectors that are hated, beaten up and bottoming. For example, in 2009, casino stocks collapsed due to huge amounts of debt. In 1998, Russia defaulted and collapsed, and in 2001, Argentina did the same. If you look at the returns that followed these collapses, they were huge, in the hundreds of percent in the coning years.

When you get a chance to buy companies and economies for pennies on the dollar, you have to take it. Most, however, don’t and get scared off.

Right now, Europe and many other sectors are trading a huge discounts. Gold stocks are trading at one-third of their historical valuation, yet investors shun them cause they are scared they will drop more.

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Instead of chasing the current hot tech stock, you should look at the beaten up and unloved. European, gold, solar and coal stocks all trade at decent values at the moment.

Trust me investors will be rewarded by moving into these sectors in the coming years … much more than they would be chasing the current hot fad.

About the Author: David Skarica David Skarica is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He also writes the Gold Stock Adviser. Discover more by Clicking Here Now.