Mar
04
2009

  Don't Listen To Him!

Good grief, I've already made several posts today, but this headline in Yahoo! finance really bugs me:
Obama suggests buying stocks, defends econ plan
In the article Obama is spouting off about how now that the stock market has fallen yet again, that it's a good time to buy stocks if you're a long-term investor.

DON'T LISTEN TO HIM!

It is NOT a good time for long-term investors to buy stocks, unless you are very knowledgeable, can analyze financial statements including understanding the notes to the financial statements (if you are not a CPA or financial lawyer, I'm going to predict there is a 98% chance you are not going to have adequate skill in this area), and are extremely selective in your stock picks (meaning you are choosing individual companies to invest in, not broad segments of the market through ETFs).

It breaks my heart that there are people out there who are going to think the president is smart enough to know what he's talking about, and will take his investing advice. He's just a politician, and one without any particular financial savvy, in my opinion.

Now, there is in fact a chance that the market won't go a heck of a lot lower (although I personally think it will), but even if the market is near a bottom, it doesn't mean it's time to buy! Keep your money liquid until the market is poised to GO UP! And that could be years from now. Might as well be earning a little interest from cash in your bank account for the next several years, than have your money invested in stocks that will be flat for several years.

Do I KNOW that the turnaround isn't imminent? No, no one does. But who are you going to believe-- a president in whose best interest it is to artificially (and temporarily) inflate the market in order to bolster approval for his massively misguided spending plan, or a woman who has nothing to gain from people preserving their cash? Seriously, if people bought now I'm going to profit from the rise in market prices (and if I profit from prices going lower, trust me, prices aren't going lower just because consumers are sitting on cash). If people keep their money in cash it only serves to reduce bank demand for deposits which keeps the interest rates low, which is a bummer for me since I'm primarily invested in cash. I just hate that the media promotes such misinformation and bad advice when it comes to personal finance and investing, and this little blog is the only way I know how to do what I can to help ordinary people NOT get hoodwinked by the "experts".

The vast majority of the people giving financial advice through mass media are wrong. Dead wrong. They are media people, not finance people. The people who know what's going on are not wasting their time appearing on MSNBC or talking to AP reporters. The people who know what's going on are busy making money. And by the time any of the talking heads hears about the latest trend, it's too late for anyone hearing about it to profit, the deal is done, over, forget it. Think about it, if you were smart enough to know how to profitably invest in this market, do you think you'd be wasting your time giving interviews, or would you be hunkered down by your screen trading? You certainly wouldn't be listening to what politicians are saying about the market, any more than you'd be going to your local medicare bureaucrat's office for health advice instead of your doctor. Although don't be surprised if Obama starts giving advice that you SHOULD go to the government for your healthcare.

It's madness, all of it. And I'm not playing along with any of it. You can if you want to, but you'll get slaughtered with the rest of the sheep. But why not? Misery loves company, you'll be right there in the same boat with most of your friends. But I just get no enjoyment from dancing on the deck of the Titanic, even if the band is swell. I'm outta there, rather be drifting alone on an inner tube by myself in the middle of the ocean where at least I'll be able to hang on and bob along for a few years eating seaweed until things get better, instead of staying on the "safe" boat with all my friends as it sinks and pulls everything in its wake down into the deep as it falls.