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The renowned British economist, John Maynard Keynes, said many years ago, “It is far better for an institutional investor’s reputation to fail conventionally than to succeed unconventionally.”
In other words, buying the same things everyone else is buying, and selling the same things everyone else is selling is the best way for an institutional investor — or a Wall Street insider — to manage risk and stay in the game.
But there’s no need to criticize Wall Street for its self-serving behavior. Instead you can recognize it and be glad for it.
It’s Wall Street’s “stay with the crowd” behavior that creates significant opportunities for you to make big profits — opportunities to buy what is out-of-favor with professional investors and to sell them the hottest trend.
That’s the Mindset Most
Successful Investors Have
You see, they’re contrarians — meaning they are willing to go against public consensus when the odds and potential payoff are in their favor.
They embrace investment opportunities presented by running against the crowd, motivated by the great rewards that come from venturing down the path less traveled.
And now as Wall Street’s attention has turned to bombarding us with an endless stream of facts and stats about the fiscal cliff, three of the most under appreciated investment opportunities currently available are the:
• SPDR Gold Trust (GLD)
• WisdomTree MidCap Dividend Growth Fund (DON)
• WisdomTree Emerging Market Equity Income Fund (DEM)
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| Everyone should own a little gold. |
GLD is an ETF managed to reflect the price of gold bullion. Gold has a place in every investor’s portfolio because it serves a dual purpose: Protection in the event of a financial crisis and a hedge against currency debasement, which ultimately leads to inflation.
And as the value of paper currency falls, GLD should appreciate considerably.
DON and DEM are also ETFs. Their underlying portfolios are carefully assembled by WisdomTree, which is an investment management group that has received high accolades for its focused ETFs.
Both are particularly attractive because of their emphasis on dividend-paying companies, an important component in growing your nest egg. Moreover, the holdings offer geographical diversification including in the emerging markets, which offer the best chance for growth in your portfolio.
Combined, these three ETFs should put you in the catbird seat to profit from short-term central bank actions and growth prospects around the world in 2013 and beyond.
Enjoy your holiday weekend,
Bill Hall
Bill Hall is the editor of the Safe Money Report. He is a Certified Public Accountant (CPA), Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP). Besides his editorial duties with Weiss Research, Bill is the managing director of Plimsoll Mark Capital, a firm that provides financial, tax and investment advice to wealthy families all over the world.