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Archive for April, 2009

5 Strategies for Wealth Recovery

Monday, April 20th, 2009

(Reprint)

We posted the following White Paper on our website in April of 2009 but felt compelled to repost in our new blog.  Not only did the market behave as we suggested it might over the last year but the specific strategies we recommended employing are arguably more important to implement  now (after the “bounce-back”  from over-sold levels)  than they were a year ago.

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Decision Investments believes that the recent strong performance in the stock market is finally signaling a legitimate end to the worst bear market in 70 years.  The stock market is considered to be a “leading indicator” and as such typically moves well in advance of the actual economy.  As of this writing, market indexes have moved more than 25% above their March 6th lows suggesting that the domestic economy is likely poised to strengthen over the next six to eight months.  

We do, however, believe that the stock market recovery will be long and arduous and that Dow 15,000 is a long, long ways away.  More realistically the major markets, after an initial “bounce back” from over-sold levels, will likely experience modest gains followed by a period of consolidation for the foreseeable future.  The ultimate goal will be to participate in the recovery to a greater extent than the decline and in doing so attempt to have investment accounts fully recover before the stock market has.

For likeminded individual investors who don’t want to passively wait while being at the mercy of the markets, Decision Investments suggests the following proactive strategies:

1. Dividends… Yield Matters

2. Tactical … Don’t “set it, and forget it”

3. Sector Bets… Be Industrious about your Industries

4. Concentration… Over-diversification is the enemy to performance

5. Bonds … The other white meat

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