How You Should Invest After the Bailout

Does the bailout mark a bottom? Is the worst over? Is it okay to stop feeling nervous?

No, no… and yes.

The bailout is the equivalent of a dying patient taking aspirin. The relief is minor and temporary, but the outcome doesn’t change.

The economy is still heading into a recession. The markets will go down some more. But you shouldn’t feel nervous. If you read ETR, you should have a pretty good idea of what’s coming and what to do about it.

Why Wall Street hasn’t faced up to the seriousness of our economic problems is a mystery to me. Yes, Wall Street is a buying machine… and you can’t buy if you’re not optimistic. Still, we’re going to pay for their unfounded optimism. They still have high expectations of companies doing well next year. They won’t. They disappointed Wall Street this year. If anything, the Street is in for even more disappointment next year. And profits that don’t meet expectations are downgraded and sold off – driving the stock market down.

This is no time to gamble with your money. Gold is always safe. Silver would also make a good investment. Plus, there are plenty of investment-grade corporate bonds offering over 5 percent interest. And whether you’re investing in bonds or equity, stay away from the financial sector. If anything, the bailout has made financials even more unpredictable these days.

[Ed. Note: The economy may look bleak right now. But you still have opportunities to prosper – if you look in the right places. ETR Investment Director Andrew Gordon has pinpointed a method – which has been accurate 92% of the time – that you can use to make money on stocks as they fall. It all begins with a “red flag announcement.”]