Investment markets got you down, Bunkie? Been blown away by derivative stun
guns? When will portfolio market values move back to 2007 levels--- and then
what will you do about it?

It's time to overthrow the evil Masters of the Universe and deactivate their
weapons of financial destruction. Let's outlaw the brainwashing that has changed
how average investors look at and value their investment portfolios.

It's time to exorcize the Wall Street demons and return to stocks and bonds---
and to QDI, "the Force" for long-term investment portfolio security.

Speculating is complicated, even for financial rocket scientists. What most of
us want (or would certainly settle for) is simplicity, stability, and reasonable
growth in our productive working capital.

A return to plain vanilla investing strategies with operating procedures that
minimize risk and encourage understanding of the financial markets needs to
become part of our financial force field.

As bad as things have been since this black hole appeared, investment models
true to fundamental concepts, simple strategies, and disciplined operating rules
have probably bettered the market numbers in at least six important ways:

One - Higher lows during market downturns: Equity portfolios managed using basic
principles of quality, diversification, and income (the QDI) and disciplined
profit taking rules should not fall as much in market value as most mutual funds
or poorly diversified portfolios.

Constant cash flow, even if not reinvested, places a floor under market values,
and investors feel better when their values fall less than the market averages.
In soundly managed programs, buying activity slows as prices rise--- increasing
"smart cash" for buying at lower levels later.

Two - Moves to cash or other sectors before bubbles burst: Disciplined profit
taking automatically moves dollars from overheated sectors to cash or
undervalued sectors during rising markets. This process creates capital that can
be used to lower the average cost of remaining positions or to take advantage of
new opportunities.

Investors feel better when no profits have been left on the table.

Three - Maintenance of planned income streams during financial crises: Most
financial plans focus so strongly on growing market values that they lose touch
with the need for planning a dependable retirement income. They rely on selling
equity fund units or inflated indices for cash flow, instead of generating
stable income with less exciting cash producing staples.

Steadily increasing annual income can be placed on "cruise control" through the
use of the cost basis asset allocation methods contained in the WCM (Working
Capital Model). How many would-be retirees are searching for jobs because of
improper income planning?

Four - Faster movement to new all time market value highs: When investors have a
reasonable understanding of the various cycles impacting their investment
portfolios, they develop valid expectations about the market value "performance"
of their portfolios.

They are less likely to initiate knee-jerk or panic driven transactions and more
likely to take advantage of the new opportunities that lower security prices
always create. Additionally, higher quality securities invariably are in the
first group to regain popularity with investors as good news reports begin to
dominate.

Five - Steady growth in working capital in all market environments: Working
capital is measured in terms of cost basis instead of market price. As a result,
all income generated from interest, dividends, and realized gains grow working
capital regardless of the direction of market prices.

A treasury bond generates the same income at $85 as at $115. Most closed-end
municipal bond funds (CEFs) maintained their 5% to 7% tax-free cash flow
throughout the financial crisis--- in spite of their reduced market values.
Similarly, short-term profits on high quality securities have been growing
working capital since the current rally took hold in March.

Six - Annual growth in realized "base income" in standard portfolios: WCM
portfolios are income machines by design. No security is ever purchased if it
does not produce regular dividend or interest payments; at least 30% of all base
income should be reallocated to income-objective securities.

Similarly, every dollar of capital gains income, and net portfolio additions are
partially allocated to income producers--- and the use of a cost based asset
allocation formula insures annual income growth.

Few financial professionals begin their careers with any encouragement to become
comfortable with individual equity securities and the surprisingly large variety
of individual, relatively uncomplicated, and generally safe(r) income producers
available for their clients.

Financial products are far more lucrative for their institutional employers and,
as a result, the incentives for brokers and advisors to sell products is pretty
much irresistible. Few pros can afford to be one with "The Force".

The Dark Side of investing beckons like a Siren's song, luring the majority of
professional advisors away from the safety and simplicity of QDI. Institutional
propaganda, projections, predictions, and hype have the same affect on
unsuspecting boatloads of speculators who most often become shipwrecked on the
derivative rocks.

Investors and their professionals need to re-evaluate their product orientation
and plot a global escape from the Dark Side of investing.

Contact the "Skywalker" foundation for emotional and financial support while
making the transition--- and may the force be with you.


Steve Selengut
http://www.kiawahgolfinvestmentseminars.com/InvestmentWorkshopWebinars.htm
Author of: "The Brainwashing of the American Investor: The Book that Wall Street
Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"
PGA Village Golf Outing - Seminar October 2009



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