I want to change how you think about the stock
. Let me explain...
In the course of a month, we receive an enormous amount of
emails from subscribers. And we read every single one of them.
There is simply no better way to know how investors are feeling
than by reading the emails you send in.
As you'd expect, when the market tanks and people get nervous, I
get a lot more email than when the market is rising. When the
market goes up, people don't worry about their stocks. They go to
dinner. They go on vacation. They enjoy their lives.
But when the market falls, they believe they are about to lose
all their money. People worry. They lose sleep. They just want to
sell so that they don't have to worry anymore. It's been that way
forever. For most people, it will always be that way.
But I want to change the way you think about the market. Sadly,
based on experience, I can say confidently that most of you will
not follow my advice. But I'm convinced that those who do will be
better -- and wealthier -- investors because of it.
So why am I telling you this right now?
It's all because of a single email a reader sent me about my
Top 10 Stocks
advisory just days ago.
For privacy, I won't publish this subscriber's name. But here's
what he wrote me in the middle of a market sell-off where the
Top 10 Stocks
portfolio continues to beat the S&P:
"The report should give an overview of performance, and
suggested stop loss levels on the recommended securities.
"Frankly, the performance of late does not inspire."
Now, I don't personally know this subscriber. I don't know which
securities he owns in his portfolio, and I don't know his investing
track record. But I'd be willing to bet that more often than not,
this investor loses money in the market.
How do I know that? Because he is focused too heavily on short-term
The instant a stock falls, investors want to know whether they
should sell. It doesn't matter if the underlying company is
performing well or not -- the fear of losing money is simply too
much for most small investors to stomach.
I'm convinced this is why most investors lose money in the
Investors driven by fear and short-term market moves are the
ones who sell when the market falls... and buy when the market is
rising. This is a perfect recipe to lose money and ensure that
they'll never see the greatest profits.
Don't believe me? Consider this example...
. During the past decade, Apple has been one of the market's best
investments. Since 2003, the stock has returned more than 7,500%.
It has made many investors millionaires. But this doesn'tmean the
always went up.
Take the 2008/09
. Apple's stock dropped more than 50% -- falling even more than the
Countless investors dumped the stock... most after it had
already dropped sharply. Then they refused to have anything to do
with it on the way back up. So not only did they suffer a loss on
the shares when they sold, but they also missed out on Apple's
sensational multi-year rise:
I'm telling you this now, because volatile markets are simply
something investors will have to deal with for the foreseeable
future. There will be times of calm, and I believe over the long
term the market will move higher. But thanks to serious debt
problems in the developed world and tepid growth worldwide, the
market will continue to swing, sometimes wildly.
Although I'd love to see a steadily rising market, these
sell-offs are opportunities to pick up shares of great stocks at
bargain prices you wouldn't see otherwise.
That's how I want
to view the market.
But if you looked back at the past century, then you'd see there
hasn't been a single sell-off that didn't later turn out to be a
terrific opportunity to buy stocks, assuming you bought solid
companies at attractive prices and had the resolve to hold them for
the long term.
This includes The Great
... the sell-off in 1937... the sell-off between 1973-74... the
1987 crash... the "Dot-com" crash... and the most recent sell-off
Action to Take -- >
All of these times turned out to be wonderful opportunities to buy.
I understand why many investors get nervous. But the most
successful investors use these periods to generate enormous
If you're looking for stocks that are good buys regardless of
what the market is doing, then don't miss the latest presentation
on my "
Top 10 Stocks for 2012
." One stock has raised its
110% in five years... another has $8.25 per share in cash (45% of
its share price)... and another yields 8.0% while it has nearly
year-over-year. These are the types of investments that make up my
Top 10 Stocks for 2012
-- Paul Tracy
Paul Tracy does not personally hold positions in any securities
mentioned in this article. StreetAuthority LLC does not hold
positions in any securities mentioned in this article.
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