Dear Savvy Friend,

Everyone is telling you to stay away from investing in shares… Right? Well, now is the perfect time to close your ears and just ignore them.

You see, right now, dozens of shares are trading at bargain prices. And if you invest in the long term – you can’t lose. If you’re a long time reader of my newsletter Personal & Finance Confidential you’ll know that our share analyst Jon Worth advises investing in gold shares at the moment. Well, our readers followed his advice and in the last month I’ve made a 13% gain. And I want you to make those kinds of gains too. And that’s why today I wanted to share a piece of investing advice that Jon recently shared with me…

In the name of health, wealth & happiness,

Pascale Barrow
Managing Editor

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Don’t believe what the papers are saying about the stock market – here’s why…

Jon Worth – Personal & Finance Confidential’s share analyst

You’ll hear newspaper reports saying that timing the market is close to impossible; but if you position yourself in a sector that you believe will outperform the general market, you are likely to do very well.  And just because the ‘herd’ feels that a share won’t do well – doesn’t mean it’s true. Often it’s quite the opposite!

So how do you go about outperforming educated fund managers?

Investing directly in shares on the market might seem a little intimidating at first, but that’s exactly what you need to do!  I realise that many of you might be questioning your ability to outthink all those highly educated fund managers, but remember that it was not too long ago that an 11 year old outwitted and outperformed all analysts to come second in the sixth-month Stifel stock challenge.  The St Louis Journal reported that the youth came second to a 21-year-old college student!

How to get started...

The two most important ways to get on the road to investing success are:

1. Become familiar with the market.  As a starting point, read a financial publication.  At first it might seem slightly confusing, but as with all things your persistence will soon pay off.

Editor’s note: A publication like Personal & Finance Confidential is a perfect place to start. Every month we tip inexpensive shares with significant growth potential. Click here to find out more…

2. Open an account with a reputable stock broking firm.  Don’t choose the largest one, they simply won’t have the time to hold your hand while you take your first investment steps.  You can get a list of broking firms from the JSE with contact details.  Set up an appointment and see what services they can offer. Your stockbroker will become a second spouse, guiding you, supporting you and even occasionally arguing with you.  Once you’ve signed up with a broking firm you’ll be in a position to start investing directly on companies listed on the JSE.  You’ll be able to pick and choose whichever share takes your fancy and have the flexibility to chop and change whenever you feel it’s necessary.  You will also be in the position to fully, or partially, liquidate your portfolio whenever you need cash.

Whatever you do DON’T follow the herd

Now that you are in a position to ‘go it alone’ you will most probably be inclined to start investing after the market has moved up strongly.  But this is precisely the time when one should become cautious.  The time to enter the market is when fund managers are looking for buildings to throw themselves from.

This obviously requires a tremendous amount of courage.  To go and buy a share when every market commentator, and apparent ‘expert’ on radio and television is prophesising doom and gloom is not easy.  But if you’ve done your research you can buy shares with a fair degree of confidence despite what’s being said around you.  And once you’ve made your selection all you’ll need is the key ingredient… Patience!

If you have positioned yourself in a share which you feel offers good value, even though the market seems to dislike it for some or other reason, don’t expect miracles overnight!