InvestorsFriend Inc. Newsletter January 11, 2003
Market Attractiveness Now.
Although I am optimistic about the market this year, my update of the valuation of the DOW shows that under conservative assumptions, the DOW is somewhat over-valued.
Classical Asset Allocation theory would therefore suggest a reasonably high allocation to bonds and cash.
My own approach has been 100% equities and hoping to continue to beat the market averages through my detailed fundamental analysis. I have also begun to put more emphasis on dividend stocks and income trusts in order to provide some stability.
INVESTMENT STRATEGY
See my new article Do As the Rich Do. It seems like the average on-line investor treats the stock market like a casino. This comes mostly from lack of education and lack of patience. Most of us are trying to get rich. But consider that most rich people did not get that way at the lottery booth or at the casino. Most of us would be well advised to be more patient and take the slow but steady approach.
If you only have a few thousand in the market then fine, go ahead and roll the dice if you are inclined. But if you have accumulated a substantial amount through good luck or good management, now is a good time to focus on insuring that you keep what you have and don’t place yourself at undue risk. That does not mean getting out of equities. But it may mean getting out of junk stocks that are held up only by hot air, if you are in that game.
Stocks To Buy Now
I have specific Buy and Sell advice available on a paid subscription basis. I currently have about 29 reports available. 7 of these are rated Strong Buy and many of the rest are Buys but some are sells.
The 7 strong buys were up an average 5% in year 2003 to date. In addition there is a model portfolio for 2003 that is up 4.5%.
Now is a good time to access all of these reports for a total charge of CAN $10 per month. You can unsubscribe at any time which means that you can access all of this information for 30 days for just $10.00
These reports will be updated over time. In particular, I expect to begin to make updates as the Q4 2002 figures start to roll in over the next few weeks.
These tend to be reasonably conservative stocks when purchased in a diversified portfolio. All of these picks are based on solid fundamental analysis that takes at least 4 hours when a new company is added and about 90 minutes for a quarterly update.
When you purchase this research you are getting access to many many hours of diligent educated effort at a bargain price. And, it is from an independent source. I have no reason to flog any particular stock.
Get access to high quality research and show your support for independent research by Subscribing now.
EDUCATIONAL SECTION
I posted a new article that explains the Bid Ask Spread. In general investors should be aware that this is a hidden cost of trading.
I also posted a new article on Mutual Funds. In general I believe that do-it-your-self investors should make only limited use of mutual funds. Often, exchange traded funds will achieve your objectives at far lower costs and therefore, higher returns. Investors who require advice from a financial planner can stay in mutuals because that is how their planner gets compensated.
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