Hate the General Equity Markets?

How come all the financial advice commercials show smiling, happy people on the beach… or looking smug at their personal computers? Where are the real people?

Where are the people that bust their butts all day at work, worry about their kids, or parents, or both, and then, with their last lucid thought of the day, worry about their wealth?

Where are the people who are angry at bailed-out billionaires, trillion dollar debts and the printing of new money? They know that, in some way, all of these things will take cash out of their pockets.

I think we need a reality show for angry savers.

Then we need a revolt.

Given the manipulation of the forces that drive equity prices – things like interest rates and propped-up companies – we should be angry. Spitting mad, in fact.

We’re being forced to play a game where the rules are no longer fair and we can’t trust the game master anymore. It’s like finding out your uncles are cheating in your game of poker and they won’t let you leave the table until you’re bankrupt. It seems they’ve super-glued you to your chair, so what choice do you have?

Well, I’m here to tell you: there’s always a choice…

While equity markets have been on a tear lately, there is a wall of worry that is tall and steep (and rightly so) . The euro zone is in a recession, with the U.S. not far behind. China is slowing down.

On home soil, our fiscal cliff is edging closer, unemployment is high, and we are one Fed announcement away from… what? Saving grace? The last straw?

This is not a world in which we should simply buy equities, diversify and hope. That’s a recipe for wealth destruction. There’s a better way, but it involves work, which is why most people won’t do it. But that’s OK. It leaves a little more for the rest of us.


This is a Call to Action

This is a call to action for those who are fed up with the rollercoaster of hope and fear in the general equity markets. Instead of staying on the ride because you feel you have no choice, get off now and focus on the income side of the ledger. Not necessarily bonds, although there are some that make sense.

Instead, look further afield. Focus on stocks that pay handsome dividends that operate in growing markets. Areas like healthcare and multi-family real estate trusts are great hunting grounds. That’s where we’ve made some solid returnrns in our Boom & Bust portfolio.

There are other areas worth considering as well, like energy trusts and energy transport companies. The income streams from these types of investments are in the 6% to 10% range, well beyond what you could get on a bond. They also have the distinct advantage of getting investors away from the “did it go up or down today?” game.

So go ahead, roll up your sleeves and dive into the research. The goal is to find companies that are in growth industries supported by the aging boomers, are growing and profitable and pay a respectable stream of income. That’s our main goal each month in Boom & Bust.

From there, you’re just a few investments away from thumbing your nose at just about everyone on CNBC and at the Fed. That’s a pretty good feeling.


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Ahead of the Curve with Adam O’Dell

And The Yield Winner Is…

Nearly all the juice has been squeezed out of bonds. This leaves income-oriented investors searching elsewhere and increasingly they’re turnrning to dividend-paying stocks and funds.