12/20/2006
Well, it's been a great year for us here in Fabian-land and I want to thank all of my Alert readers for joining us throughout what has been a tremendous 2006. As we approach another new year, I am brimming with optimism. In fact, my optimism meter is on high right now. I may be more optimistic this year than in any year in the recent past.
Why am I so optimistic that opportunity will reign in 2007? Well, for the first time in several years the challenges facing this market, while still numerous and troublesome, are both identifiable and conquerable.
Yes, we enter the year with an extremely overbought domestic stock market. And, in my opinion, we are ripe for a pullback very early in the year. But rather than starting things off on a sour note, if you are invested in stocks right now, all you have to do is put a stoploss on all of your invested positions. By setting a stoploss, you'll be able to bank profits, protect your money and wait out the coming market pullback from the safety of the sidelines. When the time is right, you'll be able to re-enter the market at very attractive levels.
In addition to the opportunities coming in 2007 for a low-risk entry point to the overall market, I think there are other, perhaps even much more lucrative buying opportunities ready to come into fruition this year.
Let's take a quick look at a few of the targets of opportunity I see lighting up the 2007 radar screen. Some of these opportunities we currently are taking advantage of in my Successful Investing advisory service. Others we expect to be taking advantage of sometime soon. Of course, markets always are changing and what constitutes a good opportunity today may not be one tomorrow. That said, here are some of my favorite sectors as we begin this year of optimism.
Healthcare
Have you heard about this little demographic shift everyone's been saying will change the landscape of America? In fact, you probably are one of the many people, including myself, that fit into this demographic category of folks born right after World War II and right up until the mid-1960s.
Sadly, as we age, we can't escape the reality that our bodies start to break down. Of course, we are all young at heart and none of us seems to want to admit that our days of staying out late and getting up early to surf will eventually start to slow. This combination of our need to remain young and our need to fix all the problems that plague us make the healthcare sector one of my favorites for 2007.
Energy
Every market cycle there are certain sectors that, for a variety of technical, fundamental and even political reasons, are just too attractive to pass up. Over the past several years, energy has been one of these sectors.
On the surface, it is not surprising that the energy sector is on the rise. We all are intimately -- and sometimes even painfully -- aware of rising prices at the gas pump, not to mention the rising cost of heating our homes. Anybody even casually familiar with the news knows that particularly during the past year, political strife in oil-producing countries has been on the rise.
In my opinion, the trend toward higher energy prices, and a corresponding upside in energy stocks, is going to continue in 2007.
The reason for this performance is because gold traditionally is a safe haven in times of turmoil. Well, if you want to hedge your bet against the possibility of another "successful" terror attack and/or heightened geopolitical tensions, you must have a small slice of your portfolio in gold.
Hey, these are just three of the sectors I see ripe for a big run in 2007. Of course, the key to profiting from these sectors is to know when to buy, when to sell and when to stay on the sidelines.
If you are tired of just guessing about how to make money, then you're solution for 2007 is to get yourself a plan. Such a plan should get you into stocks and market sectors that are trending higher, while keeping you out of stocks and market sectors trailing behind.
Do yourself a favor in 2007. Try my Successful Investing advisory service. It could be the best holiday present you've ever given, or received!
Click here to learn more about Successful Investing
Finally, I want to let you know that the Alert will not be published next Wednesday. My colleagues and I are taking a little time off to celebrate the holidays, so our next Alert publication date will be Wednesday, Jan. 3.
My optimism meter is set on high as we move into 2007 and I am looking forward to making this year the best ever!
Happy Holidays
When it comes to variable annuities (VAs), I have what could be described as a classic love-hate relationship. I love VAs because they are a great tool to help you enhance your retirement nest egg. They offer unlimited contributions -- a great benefit for those who receive some type of windfall such as inheritance, a life insurance payout or a big settlement. You also can get the benefits of active portfolio management, plus you can select your own type of income stream payout, such as a lump sum or a monthly distribution.
I hate VAs because, so often, they are used by unscrupulous brokers who charge outrageous commissions to gullible investors who often are unaware of what exactly they are buying. Also, I hate when IRAs are put in a VA, because there simply is no reason for a tax-sheltered investment to be placed inside another tax-sheltered investment. Finally, I hate two popular VA strategies, buying-and-holding your investments without regard to market conditions, and the so-called "index" annuities, which make promises of performance that they may not be able to make.
So, how do you put the love on your side and how do you minimize the hate when it comes to VAs? Well, that's exactly what I cover in my online seminar, The Secrets to Variable Annuity Success. If you want to find out more about these great retirement investing tools, I encourage you to check out my seminar by clicking here.
I guarantee that after this seminar you'll be up to speed on the essentials of smart variable annuity investing.
As 2007 quickly approaches, I want you to take a step back and ask yourself a few important questions about your money.
The purpose of this monetary self examination is to get you focused on the specific actions you should be taking to help you achieve your financial goals in the year ahead. These are actions you may have overlooked in 2006 and maybe they are things you weren't even aware you should be doing.
Whatever your personal situation, everyone should start the year off by honestly answering the following five questions:
1. Am I saving all I can for my retirement?
You know I am always telling you to maximize your retirement savings accounts, but are you really doing so? I feel that a good, achievable target is to save 15% of what you make. And, if you earn big money, say over $150,000 per year, your retirement savings goal should be about 20%.
2. Are my assets at the right company?
As we enter a new year, maybe you should be moving money out of a mutual fund or bank and getting it into a discount brokerage account that allows you to buy exchange-traded funds (ETFs). You should also look for a brokerage firm that charges you low transaction fees.
3. Do I have any retirement accounts left at a previous employer?
I know it's tempting to just leave your 401(k) with your former employer and avoid the hassle of rolling it over into an IRA, but by avoiding a little paperwork you could be short-circuiting your performance objectives. Make sure you get yourself out of any old 401(k) or other retirement accounts you currently hold.
4. Am I taking advantage of the opportunities in sector ETFs?
Investing in stocks is not just about buying the Dow or S&P 500. In 2007, the biggest opportunities will be found in sector ETFs. Some will even be found on the other side of the globe. The only way to insure you aren't missing out on any of the abundant profit opportunities is to make sure you put some of your money into the best sectors available.
5. Should I continue to hold every position in my portfolio?
Nothing lasts forever but the earth and sky, as the song says, and that includes your investment holdings. What worked in 2006 may not work in 2007 and that's why it is important to review every holding in your portfolio. If it ain't broke, don't fix it. But if it is broke, or if that holding is causing you some financial pain, get rid of it and move your money into a sector that is performing well. Don't be afraid to act in defense of your own money. The only person who suffers from your inaction is you.
Worried about managing risk in this uncertain political and economic climate? If you aren't worried, you should be. The risks we all face right now require sound financial stewardship. These days, you just have to know how to protect yourself.
That's why I want you all to go here for your FREE Special Report titled, "The Successful Investor's Guide To Managing Risk."
This Special Report outlines the seven biggest threats to your financial nest egg and how you best can mitigate those risks by employing the strategies that have helped protect Fabian investors for nearly three decades.
If you invest, then you need to worry about risk. To guide you, use "The Successful Investor's Guide To Managing Risk".
Do you know the factors that are important to measuring your confidence level in your current investment plan? Can you answer the following statements in the affirmative?
I have a solid plan in place with Bear Market Protection (a clearly defined sell-discipline on my holdings) to protect my assets if the market suddenly turns.
I know my broker is proactively monitoring my money every day.
I know my investment plan will provide the sufficient asset growth I want and produce the income stream I need for my retirement.
I know that my investment advisor is a good value. We have more than just a bull market strategy and we avoid any unnecessary risk for my plan. Fees are reasonable.
I know my advisor is an expert, has the experience and is prepared for any situation.
I am taking advantage of investment tools like ETFs that keep expenses low.
Overall, I know I have the right plan in place to reach my investment goals.
If you can't answer the majority of these statements with a "yes," then you need to go to our website for more information and a FREE portfolio assessment.
Don't wait a minute longer. The only thing you have to gain is financial security.
You probably all know by now what a huge fan I am of exchange-traded funds, but did you also know I do a regular ETF profile on my radio show, Making Money with Doug Fabian?
Each week, I profile several ETFs. Now, thanks to YouTube technology, you can catch a video stream of my live ETF and market updates -- and all you have to do is click here.
Plus, it's not just a one-way street anymore when it comes to discussing the markets. Sign up at the web site to comment on my videos, send me a message, and get updates when we post new episodes. I broadcast an ETF and market update Monday through Saturday that is uploaded by 5 p.m. PST. And, if you want to check out past shows go to our video archive.
Don't forget, you also can listen to the show through our podcast and live streaming whenever it's convenient for you. It's all at the site and it's just another way we are helping you to stay on top of your money.
"I have made a ceaseless effort not to ridicule, not to bewail, not to scorn human actions, but to understand them."
—Baruch Spinoza
If you've made a few mistakes with your money in 2006, don't let it get you down. The most important thing is that you learn from your mistakes, understand what you did wrong, and not repeat the same actions that got you in trouble in the first place. With a new year comes a new opportunity to make money, make good decisions and get yourself on track to achieving your financial goals.
Wisdom about money, investing and life can be found anywhere. If you have a good quote you'd like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my radio show, newsletters, seminars, or anything else.