Friday, January 2, 2009

Forget Everything You've Learned

2008 was a rough year, no doubt. But don't start to think that you can revert back to your old tactics to make money in 2009.

Folks, the 90's are over. Done. And don't start to think this year is going to be the year we revert back to the 90's.

What you ACTUALLY need to do is the exact opposite of what you did in the 90's. The 80's and 90's saw interest rates fall rapidly, but conditions from the awful 60's and 70's were beginning to improve. We had smart political discussions, making business easier. Now that we have the exact opposite scenario, your strategy needs to flip as well.

Look, no stock market in the world is going up right now. Right now the bond market (which people aren't used to and nobody knows anything about) is where all the money is being made right now. As interest rates go down, bond prices go up. The government is POURING money into the bond market right now, buying treasuries and more corporate bonds. As people start to feel safer in the economy, corporate bonds will appreciate in price, making you money.

The reality is that the stock market will probably continue to move sideways for several more years. That's not exactly heartening since we've been moving sideways for almost a decade now, but it's the truth.

We in the United States have a surplus in our 401k's, our savings, etc. The rest of the world is going to be developing and joining us in the middle class in the coming years. In order to do that they're going to need capital, which we have. THAT is the opportunity, right there. I'm sad to say that you won't be able to buy and hold mutual funds like you used to. You'll have to get in and get out where the assets are appreciating, so you need to get educated.

When everything goes up, everyone's a genius. But the difficult times like now separate the people who know what they're doing from the others, so you better get educated and be on the side that actually makes money.

If you're willing to let me teach you about the bond market and get you ready for these times, click here.

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