Fascinating, isn't it, the stock market! But aren't we "Investors" even more
interesting? Have we become the product of this media driven culture that must
have "reasons", "predictability", "blame", or even that four letter word,
"certainty"? We are a culture of investors where "hindsight" is rapidly
replacing
the reality based foresight that once was flowing in our now real-time veins.

The stock market is a dynamic place where investors can consistently make
reasonable returns on their capital if they comply with the basic principles of
the endeavor AND if they don't measure their progress too frequently with
irrelevant measuring devices. The Fixed Income Market should be even easier to
deal
with but never is. The classic investment strategy is so simple and so trite
that most investors dismiss it routinely and move on in their search for the
holy investment grail(s): a stock market that only rises and a bond market
capable of paying higher interest rates at stable or higher prices!

This is mythology, not investing. Investors who grasp the realities of these
wonderful marketplaces recognize opportunities and embrace them with an
understanding that goes beyond the media hype and side show performance
enhancement
barkers. Simply put, when investment grade securities fall in price [As they
are now with the DJIA engineering yet another reverse attack on the 10,000
barrier; and long term fixed income security prices at a level that foolishly
reflects an infinitesimal rise in short term interest rates alone!], BUY! On the
flip side (and there has always been a flip side), set reasonable profit
targets and sell. This is much more than an oversimplification; it is a long
term (A
year or two is not long term.) strategy that succeeds...cycle, after cycle,
after cycle.

So understand that your portfolio statement values will rise and fall
throughout time, and rather than rejoice or cry, take actions that will enhance
your
"Working Capital" and the ability of your portfolio to accomplish your long
term goals and objectives. This concept is summed up quite nicely in "The
Investor's Creed":

“My intention is to be fully invested in accordance with my planned
equity/fixed income asset allocation. On the other hand, every security I own is
for
sale, and every security I own generates some form of cash flow that cannot be
reinvested immediately. I am happy when my cash position is nearly 0% because
all of my money is then working as hard as it possibly can to meet my
objectives. But, I am ecstatic when my cash position approaches 100% because
that means
I’ve sold everything at a profit, and that I am in a position to take
advantage of any new investment opportunities (that fit my guidelines) as soon
as I
become aware of them.”


If you are doing it properly, your cash position is falling now, as you take
advantage of lower securities' prices, and you could well be fully invested
BEFORE the correction has run its course.


Steve Selengut
steve@...
800-245-0494
-----------------------------------------------
Read "The Brainwashing of the American Investor" Book Reviews


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