For the Biggest Stock Profits, Buy HATED Sectors Like This One
Companies / Sector Analysis Nov 10, 2014 - 02:32 PM GMTBy: DailyWealth
Dr. Steve Sjuggerud writes: "Hold your nose and buy"... That's the path to real wealth through investing.
I realize that saying that sounds ridiculous (and it doesn't even make sense). Here's what I mean:
"Hold your nose and buy" describes the feeling you need to feel, down in your bones, at the moment you're buying, to make the biggest profits.
At the end of 2008/beginning of 2009, I had this feeling...
It felt like the financial world was coming to an end. Everyone was scared to a degree that I'd never seen before.
Do you know what I did?
I took a home equity loan on my house... to buy stocks.
If you know me, you know that I am a conservative human being... I don't do crazy or stupid stuff. That was the only time in my decades of investing that I borrowed money to buy stocks.
I paid that loan off in full – just over a year later – after doubling my money.
In late 2008/early 2009, I held my nose and bought... and I was rewarded handsomely.
The more people that hate that investment, the better...
For the biggest gains, you need to buy what is so hated that even you – as the only person willing to buy – are still skeptical that you are doing the right thing.
So... what's hated right now? Where might you consider holding your nose and buying?
You have plenty to choose from... mostly in basic materials/commodities. Oil has crashed. Gold stocks have been obliterated, and most precious metals are as hated as it gets.
I am not telling you to buy these sectors today (as I prefer to wait to see an uptrend before I back up the truck to buy).
What I am telling you is the secret to making very large gains, over and over again, through investing.
You want to buy what stinks... You want to "hold your nose and buy."
While that is easy to say, when the moment of maximum "hate" is here, it is very hard to do.
After decades in the markets, I have learned that – surprisingly – the more uncomfortable you are, the better.
Most investors buy what's popular... what they will be proud to talk about at cocktail parties.
I don't. I buy what's hated... I buy what even hurts me to buy.
The more painful it is... the more you say to yourself "I can't believe I'm putting money into this at this moment," the more likely you are to have a very large winner.
You don't get very large winners from buying what other investors already love. If everyone already loves it, then where is the upside potential?
You want to buy what is hated...
Right now, a lot of different commodity-related investments are hated... which tells me they could deliver outsized gains when their uptrends return. If you're looking for hated – and you should be – this is where to look...
Good investing,
Steve
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The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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