Laws of Investing From Sir Isaac Newton

The House of Representatives voted against the $700 billion bailout plan for the financial sector. The bailout was very unpopular on Main Street because too many viewed the bill as a bailout of Wall Street.

Unfortunately, the bill was more than that. It had become a bailout for the U.S. economy. The credit markets have become so tight that it is virtually impossible for businesses and consumers alike to conduct business.

Instead of working on solutions to the problem, the politicians are too busy trying to keep their jobs and pointing fingers.

While I didn’t think the bailout was going to solve all our economic problems immediately, I did see an approval as something that would bring about some sense of order.

Now what? Obviously the market isn’t going to fix itself – so where do we go from here? That is a good question. Only time will tell, but Sir Isaac Newton probably got it right with his first law of motion: An object in motion will stay in motion and an object at rest will stay at rest unless acted on by an unbalanced force.

At this point, the market is in motion… and that movement is on the downswing. The bailout could have been the opposing force to halt the downward motion, but now we will never know. This economic slowdown is far from over. ETR readers have been advised many times about ways to protect against the downside or even profit from it.

If you insist on investing in stocks at this time, discount retailers like Costco and Dollar Tree have decent-looking charts. Two others that jump out are consumer staples Pepsi and McDonald’s.

[Ed. Note: Keep your money safe during these shaky times by making smart investment choices. Companies with strong fundamentals are best equipped to withstand major market changes. But don’t be afraid of fluctuations in the market. These movements can offer you the perfect opportunity to profit.]

Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.