Tags: ETF | metal | US | stocks

Invest Where No One Is Paying Attention

By    |   Monday, 10 February 2014 07:10 AM

When investing, people love to go where the excitement is. They love the stocks that are soaring and they love what's being talked about in the financial media every day.

However, that's the surest way I know to overpay for a company. Is there anything else in life in which you like it to go up a lot in price before you buy it? Do you like that to happen with your home, cars, food or clothing? Of course not. So why overpay for companies?

The tough thing about finding value is that no one is out there typically pointing the way to it. In fact, it's usually the neglected and overlooked areas of the market. Or, if those areas of the market are being pointed out, they're being shed in a horrible light.

Yet the place to go and look for bargains is where no one is paying attention or where they don't dare want to go.

Right now, all of the attention is on the U.S. stock market and much of the rest of the world is still despised. Yet, right now, you're paying the most for almost all areas of the U.S. stock market than you would be for stocks in other countries.

For instance, stocks in Russia and China can be bought for far cheaper than U.S. stocks can. And you can easily buy these stocks right through a U.S. stock brokerage account by using exchange-traded funds (ETFs), which track some of their largest stocks.

Another area that's been hated has been the metals: gold, silver and platinum. You see, these metals have been down for almost three years now. I can tell you that when something has been down for years in a row, almost no one is expecting it to come back. In fact, they can't see a day when it will. Yet sectors and major assets never just go away or go to zero.

So when any asset or sector/industry, etc. has been down for several years, you want to put that on your radar and watch it because most people won't be watching it and ready for an entry point. But not only does the early bird get the worm, they also get the outsized profits that the latecomers don't get.

Another area that is being neglected right now is broadly used materials like copper and iron ore (for making steel). You see, countries like China did have vast stockpiles of these and the world had formerly been growing at a sub-par rate.

However, now these stockpiles are getting worked down AND the global economy is picking back up once again. Many months from now, investors will realize that they need to be in these areas. But the savvy investor will check them out now. Again, there are ETFs that track these metals too, so you don't have to buy a futures contract in a commodity account.

And finally, another area that's beginning to show some signs of life is the agricultural commodities.

Sugar has had quite a pop lately and so has coffee. Livestock like hogs and cattle have been on the move too. And it looks like corn, soybeans and wheat may not be far behind them.

There are ETFs that track all of these individually, but there are also broader-based agriculture ETFs that can be used too.

So get in the habit of saying, what are investors NOT paying attention to. It is there that you'll have stocks and ETFs to put on your radar. Then when it seems like the sentiment for these assets is at their worst, yet they appear to be firming up, you can invest and then be patient and give them the proper time to turn around and reap you a nice profit.

God bless!

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When investing, people love to go where the excitement is. They love the stocks that are soaring and they love what's being talked about in the financial media every day.
Monday, 10 February 2014 07:10 AM
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