Let’s make 2012 a profitable year for your investment portfolio! Invest In 2012 will teach you the correct investment strategies and share many insightful investment tips. Truth be told, it has never been a better time to be an individual investor. In the past, the big guys had all the advantages. Now, the playing field has been evened. Insider information has become less and less useful, and trading commissions are almost non-existent. While the big guys must continually pore over hundreds of markets just to find places to put their money in, you can focus all your energy on one market and achieve spectacular returns! While the fund manager must consistently eek out returns (out of fear that investors might withdraw their money, which destroy’s the fund manager’s critical asset: patience), you can wait for the best opportunity and seize it! And if the market crashes, you can get out in a flash, unlike the big guys who want to get out but can’t (their size becomes a constraint). So just follow these basic rules, and you’ll do perfectly fine in 2012!Investment

  1. The most obvious rule of thumb that most people forget is: history repeats itself. Bubbles will burst, markets will rise and fall, and the market is never efficient (or else we wouldn’t have bubbles or panics!). As an investor, your job is to be right and sit tight until a market inefficiency presents itself to you; then just grab the opportunity!
  2. There is no such thing as a risky or safe asset: only a risky or safe price. Even assets that “can’t” (based on S&P ratings) go to $0 can.
  3. What is your edge? Like a player in any other game, you must know what advantage you have when investing. Without a clear advantage, there is no way you can beat the guys taking opposite positions to yours in the market.
  4. Control your emotions. The primitive human instincts, greed and fear, make us weak. And if you’re weak, you’re going to be led over the cliff. It is only natural to feel optimistic when others are ebullient, and pessimistic when others are fearful.
  5. But if you can be brave enough to conquer your fears when the markets are swinging to insane inefficiencies, then you’ll have almost guaranteed profits.
  6. Investing really isn’t that difficult. Markets historically trade in a band (for example, the peak of the NASDAQ was 35x earnings, while the low was 8x earnings). When the market moves towards one of those extremes, it’s time to initiate a position! This isn’t really that complicated!
  7. In essence, here are the three things you need to be a profitable, individual investor. 1 – Patience. 2 – Cheap (yes, being cheap is a benefit, especially when applied to the markets). 3 – A clear head

Mullins | mullins@siaaopportunity.com

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