I don't think anyone would consider themselves a wild investor...except The Wild Investor! With the market swings, government bailouts, and political stumping we need some good news. I asked The Wild Investor to come and give us some good news and how we can benefit from all the news. Enjoy!
When you think about the events that have taken place over the last year it almost feels like we are reading a book that is still being written. By the time we find a way to pull ourselves out (and we will) of this downward spiral of a market, the shelves will be littered with How I Survived the Credit Crisis Era books and paraphernalia.
You see the media has a way of exacerbating situations. While many of these outlets try to be as neutral as possible, often times they create more problems themselves than they report. We are constantly flooded with the notion that we are currently experiencing one of the worst economies since the Great Depression, soon nobody will have jobs, and all businesses will go bankrupt; however, all this couldn’t be further way from the truth. I would go as far as to say we are possibly experiencing one of the best opportunities anybody could ask for.
If you look back through history, then you will notice that many of the successful people in the world somehow found a way to be extremely profitable when nobody else could. If you delve down even further, you will notice these methods to get insanely rich were actually pretty easy and duplicatable. But if it was so easy, then how come more people didn’t profit? The answer is simple. Nobody wanted to take the risk.
Regardless of what experience you have had with the stock market, everybody can agree that there is always some sort of calculated risk. The misconception is that risk increases as the market goes down. The truth is that the risk is greater, while the market is rising.
How I have come to this conclusion is pretty simple. Lets say we are experiencing a bull run and stocks are on the rise. What happens if we decided to buy shares only to see the market suddenly turn for the worse? The higher a stock goes up; the more it can fall. Many people got trapped in this type of market just last year. We experienced huge gains, and when people finally got the courage to invest some money the market headed south.
Now lets say we are in a bear market and prices are obviously headed downwards. (like the market we are currently in). What happens if we buy some shares? There are two things that can take place. The first being the stock heads a little lower before eventually moving back up or we got lucky and correctly picked a bottom.
So you see there is less risk during a bear market. We know what the problems are, and there are really no surprises. As long as we do our due diligence and invest in solid opportunities, stocks or whatever you investment is more likely to move up, then had you bought on the rise.
The strong minded, who are able to set aside any third party news and take on that risk, will eventually be rewarded. Although the economy could still head lower, we are in a messed up time: expectations are low, but opportunities are higher.
While everybody is fleeing, the successful ones are heading towards the problem. We may be experiencing on of the worst economies, but we are also experiencing a life changing opportunity. Don’t take it for granted.