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July 01, 2009 at 04:00 AM
Just as many financial experts are telling us that economic conditions have hit bottom and won’t deteriorate further, Martin Weiss, editor of Safe Money Report, offers a far gloomier outlook. Indeed, his new book, The Ultimate Depression Guide, is based on his premise that we’re headed into America’s “Second Great Depression.” In addition, Weiss considers this depression as inevitable and a “consequence of a great housing bust, a massive mortgage meltdown, and the biggest credit debt crisis in history.”
Weiss blasts the advice most financial professionals provide to clients. He tells readers that if they have an investment portfolio, they don’t have the luxury of sticking around to see if the economy will tank further.
“Yet, that’s what most Wall Street experts are telling you what to do. Three years after the first obvious signs of a housing collapse and many months after the first major financial collapses, most people who give advice about investing are in denial…. Wall Street cheerleaders refused to admit that an obviously massive collapse in the nation’s largest industry would inevitably lead to an equally massive collapse in the nation’s economy.”
He writes that financial advisors have wrongly persuaded investors to stay the course, to keep their money in stocks or even buy more. He describes the buy-and-hold approach as “dead,” and if one holds on until the “bitter end, it could take a generation or more to recoup from stock market losses.”
The author writes that as long as we have a financial crisis, recession or depression, the risk of loss is greater than the opportunity for profit. “If there was ever a time when stock market investing is too risky, this is it,” he asserts.
He thinks investors should “get their money out of danger before it’s too late!” He advises readers to consider market conditions when deciding when and how much to sell. For instance, if the stock market advances due to a temporary government-inspired rally, Weiss tells readers to sell. If the stock market is already down, he suggests selling half of the holdings. And if a market is in a panicked frenzy, wait for the panic to subside and sell half.
