Since the market turned around and started doing its rocket imitation, most people I have spoken to are shaking their heads saying, “It isn’t real,” “It has no legs,” and “It’s 1933 all over again.” Since when are we supposed to be suspicious of a rally?
We moved from an intra-day low below 6,500 to 8,000 in a matter of weeks. It took nine months in a red-hot market, the hottest of all times for the DOW, to make the same move the last time. That was from October 14, 1997 to July 16, 1998.
The average investor missed that move, and is missing the big money again because he has to be convinced by the increase in the price of an investment, or the market indexes, that it’s okay to get in. That’s why most people buy high and sell low. It’s also one of the major reasons why most people lose money in the market.
If the key to real estate is location, location, location, then the key to this market is time, time, time.
If you give this market time, you will have to try to lose money in it. That’s how perfect this environment is for making money over the next three to five years. Yes, years! Not weeks, months, or even one year. Three to five years! If you have any other time horizon in mind, you are setting yourself up for another big loss. If you haven’t learned that making money takes time, save yourself the worry and bury your money in the backyard.
Here’s how easy it will be to make money in this market, if you give it time to work. Just pick the top companies or the appropriate ETFs from the following industries: oil, healthcare, and technology. The easiest way to find these companies is to look at the top 10 holdings of any of the sector funds for those three industries. That should do it.