Saturday, 17 September 2011

Beware the "Value Mirage" - Zacks.com

Beware the "Value Mirage" - Zacks.com
By: Steve Reitmeister
September 16, 2011

Many investors are drooling over the perceived values they see in today's stock market. However, many of these people are falling into a dangerous trap that will lead to horrific losses in the days to come.

Below I will detail the mistakes these investors are making, so you can avoid the same fate. Plus I will give strategies to make money in the current turbulent market environment and the years ahead.

Looming Recession = 40% Drop in Stocks...Or More

Certainly I'm not the first guy to warn you that a recession is likely on our doorsteps. You don't have to look far to see the signs:

  • US Debt out of control
  • Consumer Sentiment is plunging
  • Manufacturing sector is contracting
  • No Jobs Growth...and signs of getting worse
  • Oh, did I forget to mention the European Debt Crisis?

I could go on, but I think you get the point. And the sad fact is that the average recession brings about a 40% decline in stock prices. Unfortunately this has the markings of an even worse than average recession, and thus worse than average bear market.

Why Do Stocks Decline So Much?

It's really a simple 2-part equation: .......

http://www.zacks.com/stock/news/60940/Beware+the+%26quot%3BValue+Mirage%26quot%3B

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