May 29, 2012
Every time the market starts to shake, rattle and roll, my inbox is flooded with emails from panicked investors asking me what to do.
Many want to sell everything and stuff their cash under a mattress, while many want to scoop up bargains like crazy. So what should you do?
For those who want to sell everything, let me show you something:
As you can see from the chart, a $10,000 investment in the S&P 500 on January 1, 1980, and held until December 31, 2011… grew to nearly $300,000. That's impressive, but it shouldn't surprise you. However, had you fled to cash and sat out just the best five MONTHS over that entire 30-year period, your $286,700 would be instantly slashed to $163,290. And even that's not thae worst of it…
If you give in to the fear mongers who take center stage during "bad" markets and troubled economic times and sit out the best 10 months, your quarter of a million dollars is cut to just $100,000.
And what if you fled to the "safety" of cash and missed out on the best 20 months? Your $286,700 retirement nest egg is slashed to $45,284. Ouch!
In other words, contrary to what the doomsayers tell you, staying invested in solid businesses and "losing money" in the occasional "bear market" won't wipe you out.
But hiding out in cash and missing even ONE historic market rally almost certainly will .
I've spent over 30 years proving this, with independently confirmed results. The REAL secret to getting rich is staying invested and making hay when the sun is shining.
I know, I know…it doesn't make the down drafts the market is sure to give us any easier to stomach. But, let me let you in on a little secret. By blending the right mix of stocks, you can give yourself a smoother ride in this market—no matter what it has in store.
It's a core part of my investing strategy, but one I don't often get the chance to share. However I'm going to take the next few days to review what stocks to buy now, and how to blend them into an optimal portfolio—for maximum gains with lower risk.
It's part of a special 3-part series for you that will show how a little bit of patience now, will go a long way in delivering big profits by year-end. Stay tuned for more!