Dear Reader,
“Remember, the great profits in the stock market are made in the buying. And by buying I mean; buying when nobody wants stocks, as per the years 1942, 1949, 1974, and 1980. It’s been a long time since we’ve seen a great bear market bottom, actually almost 30 years. I think another great bear market bottom is overdue. I’m not impatient, I’m waiting for that bottom.” - Richard Russell, Dow Theory LettersRichard Russell is one of the great financial newsletter writers. He’s been writing his much-admired Dow Theory Letters since the 1950s. He’s been around to see more twists and turns in the markets than any commentator you’re likely to read.
Russell is one of the guys we are all encouraged to aspire to in this business. A long-time friend of our own Bill Bonner, Russell has a similar passion and conviction about his writing.
And when Richard Russell makes a call, everyone pays attention. When he says there’s a major bottom overdue that should keep your enthusiasm about shares in check.
Russell explains why he’s not prepared to load up on shares right now.
“I guess the same thing bothers me as bothers the institutional money. It bothers me to put my money in a market that I think is being manipulated with stimulus projects. And frankly, if I bought stocks here I wouldn’t feel like an investor, I’d feel like an in-and-out trader who’s trying to scalp the market with the help of what I considered temporary stimulus plans.”So should we all be avoiding stocks right now? No, I don’t believe so.
Why you should keep buying shares
You can stay in the stock market, so long as you’re choosing a good mix of shares. So long as you balance your investment portfolio with some assets that are not correlated to your shares, then keep buying shares.
I had a long chat with one of our own in house stock market veterans last week. Joss Smith is the investment director of The Zurich Club. Joss was in the City for 21 years before walking out to set up his own investment advisory boutique in 2000. He’s been managing money for big investors ever since.
As we were discussing the latest issue of The Zurich Club’s monthly Communiqué, Joss was not overly bearish. Not like Richard Russell.
Joss believes there will be plenty of opportunities to make money in the markets in 2010. You just need to be selective, rather than chucking your money, without due consideration, at the market. That’s something of a theme we’ve had here in The Right Side recently: the ‘easy money times’ are over.
How you can gain exposure to gold’s ‘upside surprise’
In fact, Joss is recommending a new share for members of The Zurich Club this month. It’s a gold recommendation, which you might consider a little contrarian, given last week’s downward spiral in the gold price. But Joss is not phased…
“Gold’s bull run has only just begun,” writes Joss. “Discover how this seriously aggressive strategy could tap into its spectacular profits at the source…”
If you keep tabs on the gold price, you’ll have seen it falter these past few weeks. That’s really no surprise given gold’s phenomenal rise in the final quarter of 2009.
In dollar-terms, gold rose by over 20% from early October to the high in early December. It’s up some 40% in 2009. It’s only to be expected that profit taking has occurred into the year end.
But as Joss explains, the long-term bull case for gold is intact. You can find out why inside the new issue of The Zurich Club… and discover his “aggressive” way to gain exposure to gold’s ‘upside surprise’.
But the main point from my chat with Joss last week goes back to what I was saying about being in the market. Here’s how Joss explained it.
The best way to show it is with this excerpt from his main strategy piece this month for The Zurich Club. Joss writes…
“I’d like to show you a way to iron-clad your portfolio against any economic crash or downturn.So don’t be put off buying shares. Just make sure you pick wisely. And to get the full lowdown on exactly what Joss Smith is recommending members of The Zurich Club buy right now, click here.
“With this strategy you could virtually eliminate your exposure to serious risk. And in the right market conditions, this could even bring you significant returns – without the risky downside.
“The list of investible asset classes is not a long one. Some of the more esoteric ones include real estate, works of art, stamps, antiques, fine wines and vintage motor cars.
“But the four basic classes are those that will give you the balance you need not to be stressed about heavy losses. These four are cash, bonds, stocks and commodities.
“In my view, this is the most stress-free way you could ever make money.”
Good investing,
Frank Hemsley
For The Right Side
P.S. This December issue of The Zurich Club Communiqué is a cracking read. As well as the solid advice from Joss Smith, contributor Nick Sudbury talks of the “radical shift which will see Asia become the locus of global finance and dragging the debt-laden Western economies along on its coat tails.”
That in itself is not a new idea. We’ve covered the “power shift from West to East” many times over the years. We’ve brought you ways to profit from this before.
But this month, Nick brings you an Asian profit-play you’ll not find talked about in any mainstream finance publication. We doubt your broker would ever tell you about this one.
What we really like about it is that it’s a way to gain exposure to the huge profit potential of Asian markets... but avoid most of the risks. You can access all these ideas in the brand new issue of The Zurich Club Communiqué. To find out how to get your copy, and full details of the Club’s innovative “blue chip landlord” strategy, follow this link.
P.S. If you enjoyed this article you can find out more about our free email, The Right Side by clicking here.
