I have some hot stock tips for you.
I know you are troubled by the economic pickle we are in, but not to worry. This is the time to be "dollar cost averaging out of safe assets" and "into more risk assets --equities and corporate bonds."
Which stocks, you say?
I am so glad you asked. Here's a list:
Johnson & Johnson (JNJ)
Pfizer (PFE)
Wyeth (WYE)
IBM (IBM).
I also have picks for you in the health insurer and service sectors, but you have enough to get you started.
Don't take my word for these pearls of wisdom. They come directly from Bob Doll of Blackrock. Doll has a very impressive title. He is the Vice Chairman, Global Chief Investment Officer--Equity of Blackrock.
Doll gave investors the benefit of his views on CNBC on April 9, 2009.
Blackrock is no rinky dink operation. It manages over $1.31 trillion and has offices in nineteen countries. I can only imagine the resources Bob can call upon prior to publicizing his stock picks to eager investors hungry for market timing and stock picking advice from a real investment pro.
Since Bob is comfortable going on TV and telling investors now is the time to get back into the markets, surely he was able to predict the current crises and warn investors last year to flee to the safe assets he now suggests we all abandon.
Not exactly.
Bob did an interview with Nightly Business Report's anchor Susie Gharib on January 7, 2008.
The Dow was at 12, 827.
Bob predicted the U.S. would "narrowly escape a recession..." This would be good news for investors because Bob's crystal ball told him stocks would hit new records. For those investors who wanted to know what sectors would benefit most from the big rally, he suggested large companies and growth stocks, as well as emerging markets. Bob's "best advice" for investors in 2008 was to engage in "dollar cost averaging" and to "stick to the higher quality companies, the U.S. multinationals and don't give up on the emerging markets."
Susie ended the interview by complimenting Bob on his "interesting list of predictions."
The Dow closed on April 10, 2009 at 8083. Investors who dollar cost averaged into stocks got clobbered.
It is not surprising that Bob's predictions were so wrong. Predicting the direction of the markets is not easy. Take bank stocks for example. They were down over 55% from January 1, 2009 through March 9, 2009.
But look what happened from March 9, 2009 through March 23, 2009. Bank stocks were up over 65%.
Here's the real kicker. If you were out of the market on March 20, you would have missed out on almost 50% of that gain.
Raise your hand if your broker or advisor told you how important it was for you to be invested on March 20.
What continues to amaze me is how successful advisors and brokers are at convincing investors they should pay them to manage their money based upon their ability to predict the unpredictable. No amount of contrary data seems to undermine this flawed premise, including evidence of terrible past predictions.
You have to ask: When will investors realize that investing with those who claim a skill they don't have is harmful to their financial health?
I have an "interesting prediction."
Very soon.
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