Investor Place

FREE Investing Newsletter

Get the hottest stocks to buy and sell every week.
Investors' Insights

Retirement

Slicing Through the Election Rhetoric

August 22, 2008

By Louis Navellier, Editor, Blue Chip Growth

Meet the Expert
Louis Navellier

Louis Navellier

Louis Navellier is one of Wall Street's renowned growth investors. Investing for over 27 years, he has earned a national reputation as a savvy stock picker and portfolio manager. The New York Times called him "an icon among growth stock investors."

More about this Expert

Email This
the same boom in prices that we saw earlier in 2008.

The biggest reason for the decline in commodity prices is that the dollar has gained some strength. After all, 88% of the world's commodities are traded in dollars, and a weak greenback pushes up the prices of everything from metals to energy. But don't be fooled into thinking the dollar's recent gains are a sign the American economy is on the road to recovery! (see, "Profit From the Dollar's Free Fall")

Things are still pretty bad in the U.S., but they're even worse abroad. Recession is sweeping through Europe, with Denmark, Germany, Italy and France all reporting shrinking GDP. So think of the dollar as the winner of a race between two unpopular candidates! Any lasting strength of the dollar has to be built on positive developments at home–not worse news abroad.

It's easy to see how hopeful investors are drawn to recent events, but they're exposing themselves to big risks! I don't want to see you do the same thing. I can help you avoid these traps because I pick stocks based on fundamental values like earnings growth and operating margins. My exclusive stock-ranking tool, PortfolioGrader Pro, calculates grades for thousands of companies based on eight fundamental values and helps me and my subscribers determine where to invest our money now. This tool ensures that my Blue Chip Growth subscribers only own companies that are growing and thriving right now!

The Commodities-Financials Seesaw

Think of today's market as a giant seesaw, with commodity stocks on one side and financials on the other. Right now, we're seeing cheaper crude oil, grains and metals thanks to a short-lived rally in the financial sector. But as soon as Wall Street sees how bad things are at banks and brokerages, the money will flood out of these stocks and right into the many commodity-related companies on my Blue Chip Growth Buy List!

Make no mistake: Financials have already started dropping like lead balloons. Financial stocks have had four horrible quarters, and a laundry list of problems that continue to plague this sector. Look at the recent headlines and you'll see what I mean: Analysts estimate Goldman Sachs (GS) will follow JP Morgan (JPM) and write down as much as $2 billion in the third quarter. Five major banks recently settled lawsuits over the collapse of the auction-rate securities market, and agreed to buy back billions of dollars worth of the risky investments that started this whole mess in the first place. Things at Merrill Lynch (MER) have gotten so bad that the company has enacted a hiring freeze that will last for the rest of 2008, and could be extended through 2009.

Remember, you can't invest on hope, fear or any other emotion. You have to look at the facts and buy stocks accordingly. This is the reason my Blue Chip Growth Buy List has shattered the S&P's performance in the past decade. For 10-1/2 years, Blue Chip has beaten the S&P with returns of 267.2% to gains of just 56.4%–that's 4.7-to-1! Join Blue Chip Growth today to get in on the profits!

Untitled Document

Also in this issue: