|
Seven Shocking Events
That Will
Make Or Break
Your Wealth, Security and Retirement...
Each represents a crisis for some... and an opportunity for the
best investment strategy for others.
Which one do you want?
Dear Reader,
Money isn't funny, and many a person has jumped out a window because of losing too much of it. Shattered dreams are often shattered lives. It's not a joking matter.
Yet every day millions of investors build their stock market investment strategy, adding stocks to their portfolio that are ticking time bombs. What's surprising is that many of these stocks are well-known names -- blue chips -- and the market's volume leaders on any given day.
The poor investor just doesn't know he's got a ticking time bomb. Why? Because of hype and bunk in the markets. Bottom line: You're being blind-sided by the media and Wall Street. No matter how many CEOs are hauled off to jail or the number of brokerage firms that Elliot Spitzer hammers, you'll never know the real truth about stocks.
Fortunately, a little bit of diligence will go a long way in keeping your money miles away from these toxic cesspools. I'm going to tell you which stocks to avoid like the plague, and which ones are what I call "safety zone" stocks. I'm talking about safe stocks that promise 20% gains a year for life. I'll even reveal the name of a surprise "bluest of blue-chip" stock that offers fat, conservative profits every year -- with the potential for a juicy surge in price!
But first, let's take a step back and find out where the hidden danger is...
Everything Looks Fine...
To most investors, the U.S. economy has looked safe and sound over the past few years. Despite the terror attacks of 9/11, a costly war in Iraq and an unprecedented hurricane season, the American markets continue to rise -- the Dow has even been flirting with 11,000 this year.
And -- if you listen to the Treasury and the Federal Reserve -- the American economy is in great shape. In fact, many investors are comparing the bullish optimism surrounding the market now to the heady days of the Internet boom!
|
Well, maybe it's true. And if it is, a savvy investor stands an excellent chance of making a killing.
But Will It Get Past the
X-Ray?
Problem is, there's an Achilles heel of the market. An Achilles heel that many investors ignore -- one that underlies all of the recent successes of the U.S. economy and most of the superstar stocks of today.
I'm talking about debt and credit. Would it surprise you to hear you probably have a better credit history than the American government? And would it shock you to know that your credit is far better than that of many well-known, powerful corporations -- the biggest names on Wall Street -- companies that have billions of investor dollars to work with?
You see, even the richest companies need to borrow money to pay for acquisitions, research, enter new markets or build new facilities. But not all of them are quite so responsible when it comes to paying that money back!
Some run into cash-flow problems and can't make their loan payments. If the company can't pay back its current debt, it will probably have to borrow more money to stay afloat. This cycle causes many companies to default.
Also, a company with a lot of debt will probably need even more money to get back on its feet. Since it will have trouble taking on more debt, the next best option is to issue new shares through a secondary offering. After all, that's what stocks are for -- to provide companies with more cash to grow. But when they have secondary offerings to pay back debt, it dilutes the value of the shares you already own.
In either case, it all falls apart and they have no choice but to declare bankruptcy. But, the real question is -- how in the heck did they get the money in the first place?
From investors who have been misled, that's where.
The Achilles Heel of the Market
Here's all you need to know:
There are three main agencies that determine credit ratings for the investment world. These are Standard and Poor's (S&P), Moody's, and Fitch IBCA. They assign letter grades to represent the credit quality of a corporation or government. I'll stick to S&P to make this real easy.
The best rating is AAA, followed by AA, A, BBB, BB, B, CCC, CC, C and D. Each of these ratings can also be modified with a "+" or "-." Anything with a rating of A- or higher is considered low risk (in terms of investment). It's very likely to pay back money. A rating of BB- through BBB+ indicates some risk, but may still be investment quality. Any rating from B+ down signifies high risk -- "junk" -- and not investment quality. A rating of D indicates that the organization is in default already.
Now, while the American economy has been humming, the median credit rating for the S&P 1000 has dropped by about 30% since 2000.
The fact that credit quality is plunging means that many stocks -- even top-name "blue chips" -- are nothing more than ticking time bombs. Junk!
That's why I'm begging you -- if you are holding any of these stocks, dump them as fast as you can.
Why? Click here for the reason why you need to protect yourself NOW .