Monday, August 10, 2006

Dan Tiffin’s Newsletter Volume 1.01

From the Desk of Dan The Demographics Man

Hi everyone!

I continue to watch markets like a hawk and as we speak Dow is up another 125 points.  NASDAQ is up another 31 points which is another 1.5% and TSE up over 60 points. This is the rebound that we knew was going to happen.  We had just sent Harry Dent’s latest bulletin to back up what we were thinking. I feel for the novice investors that have never been through a correction before. So here is the definition of a correction so that next time you will not let the unknown make you act emotionally.  The facts always work but we sometimes let our emotions get the best of us.

A Correction is when stock markets, bond markets, housing markets, etc. are going straight up without a break. The markets get ahead of the fundamentals and day traders are looking for any weakness, or a reason to take profits to lock in the gains.  For professional traders that do this everyday, that’s fine but what happens is the novice investor follows the markets everyday in the newspapers or TV and listens to the news.  News people are NOT investors, they are sales people, and their product is THE NEWS!  Stock markets going up or down for whatever reason is NEWS and people pay attention, this means the TV News Programs ratings go up. 

A Good Day or a Bad Day, it doesn’t matter to them as long as it sells news and keeps people tuned in to their station.  This news affects you, the stock holder personally.  Your emotions take over and you may make a bad move due to panic.  Then let’s add in the day traders both professional and amateur and you have a recipe for disaster.

FYI, the economy has not really changed.  Yet, you have sold adding to the down turning in the markets.  This is where the best minds in the world, like Warren Buffett, go shopping.  He knows your emotions have made you sell and he only follows the real economy and real business.  Emotions never come into his decisions, it’s all business.  He and others like him go shopping for your mistake and that is why he is one of the richest men in the world.  From buying when you sell and other professionals do the same, as do the mutual fund companies.  Now, the rebound takes place. 

That’s why I say; do not watch the markets every day.   You can buy like Warren Buffett, when others are panicking, you will win the game.

Remember, once our Baby Boomers Stop Buying after 2010 that is when you sell. 

To find out more about Demographics, the Baby Boomers and how to protect your investments, come see Dan the Demographics Man.