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The Safest Investment on Earth

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It's the safest investment on the planet. There's no arguing that.

Take a look at how it has performed over the past month:

-- Amy Calistri

The chart above compares this investment to some of the other safe havens -- including gold and the Swiss franc. In the past few weeks, this asset didn't drop once.

In my Stock of the Month advisory, I bring readers my single favorite investment each month. Under normal circumstances, I only share this idea with my Stock of the Month subscribers. But I think you'll agree these aren't normal circumstances...

The Dow Jones Industrial Average posted four consecutive days of 400-point swings in August. It was the first time in its 115-year history this ever happened. And with Friday's jobs report showing employers weren't hiring in August, the picture for the rest of September doesn't look much better.

With this in mind, I want to share with as many people as possible my single favorite idea for September...


I have given countless investment lectures. Whether I'm speaking to beginners or seasoned pros, I start my talk the same way. I always stress the importance of cash as a portfolio asset. Cash gets short shrift from the business media and investment advisors. Yet cash can be your greatest ally -- especially in this kind of market.

Now, I'm not suggesting you sell everything in your portfolio and run for the hills. But with today's unpredictable market, holding a little more cash than usual isn't necessarily a bad thing.

Why now?

In baseball, the knuckleball is the most difficult pitch for a batter to hit. It's unpredictable and can change directions in mid-flight. It's also the most difficult pitch to catch.

Bob Uecker, former major-league catcher and announcer for the Milwaukee Brewers, once said: "The best way to catch a knuckleball is to wait until it stops rolling, then go to the backstop and pick it up."

Right now, the stock market has been the equivalent of a knuckleball.

No one can predict with any certainty the direction the market is headed. Uncertainty is causing investors to sit on the sidelines. And when fewershares trade, it doesn't take much to move the market.

So even though I'm following a number of promising investment ideas, I don't want to commit to a new position while the market flails. Instead, I'm using market conditions to raise cash and better position myself for this fall -- when the market is less chaotic.

But there's more...

With all this uncertainty, securities within the same sector tend to get painted with the same broad brush.

Whether they are financial, industrial, or tech -- securities are being traded as a group. But within these sectors there are always outperformers. The market's failure to recognize the cream of the crop is creating many bargain opportunities.

However, bargains don't stay bargains for long. And I've always found cash is hardest to raise when you need it the most. Without cash on hand, these opportunities could pass you by. And once they're gone, they're gone... you've missed out.

If you're holding cash, then you don't have to worry as much. You won't be scrambling to sell off pieces of your portfolio at discounted prices. You can easily pick up these bargains as they present themselves.

Action to Take -- > So though it may seem counterintuitive, consider holding cash. For the time being, it looks like one of the most opportunistic investments.

Better yet, it's an investment that's guaranteed not to lose money. And in this market this a valuable asset in itself.

[ Note : If you'd like to learn more about my Stock of the Month advisory, I invite you to visit this link. As I said earlier, my entire goal is to give readers my single favorite investing idea for the upcoming month. This "keep it simple" approach has averaged 25.5% on each of my closed trades so far. Visit this link to find out more .]

Disclosure: Neither Amy Calistri nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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