Last week, Tom Essaye told you about some of his favorite investing ideas in this space. Today, he explains why NOW is the very best time to consider acting on those ideas — along with other investments that might be on your watchlist. — Best wishes, Nilus |
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When I was a professional portfolio manager, December was always the most nerve racking month of the year in my office.
In fact, while most people were busy planning holiday parties and thinking about gifts for loved ones, we were all watching the markets like hawks, hoping for a calm and quiet end of the year.
Why?
Bonuses — that’s why!
See, the majority of portfolio managers and traders are paid annual bonuses based on their investing performance. And since that performance is based on the calendar year, you could have great performance from January through November and then get absolutely derailed by a bad December.
Because of this situation, most portfolio managers will be less active in adding new positions to their portfolios, regardless of how big the opportunity might be. They simply can’t afford to take the risk of new positions hurting their performance for the current year!
Instead, it makes more sense for them to buy something in January, when they’ll have a whole 12 months to either let the trade work out or make up for any early mistakes.
But Now That I’m Out of the Hedge Fund World,
I Want to Show You Why This Thinking Creates Huge
Opportunities for Individual Investors Like You …
This extreme short-term thinking by portfolio managers and traders creates great opportunities for investors who aren’t paid annual performance bonuses — in other words, the rest of us!
That’s because we can actually get positioned ahead of nervous portfolio managers and target areas of the market that are poised to grow next year.
Doing so gets us in ahead of these same portfolio managers who will change their allocations in early January, once their bonuses are safe in hand … and may actually boost the performance of what we buy as larger pools of money pile in later.
This is precisely why, TOMORROW, Nilus and I are releasing a special report on a handful of contrarian investments we feel have tremendous return potential for next year.
These investments were created by the government during the depths of the financial crisis of 2008, and that’s why we’re calling them “government bailout contracts.”
Interestingly enough, they are not like any other type of investment you’ve probably seen. They’re not stocks, preferred shares, or even regular options.
Rather, they’re precisely the kind of esoteric investments that I would have been looking at when I ran my own hedge fund. And yet in an interesting turn of events, they’ve become available to regular investors through normal brokerage accounts.
It really is a story worth reading — and you can get all the details in Nilus’ article posted here.
But again, I encourage you to investigate opportunities like this — as well as others you might be considering — right now. Because I can assure you that once the calendar turns over, professionals will stop sweating bullets and start making major new waves in the markets.
Best wishes,
Tom
