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  • Only Lunatics Need Apply For This Stock Market Rally 0 comments
    Apr 10, 2013 7:46 AM

    This is the worst we've seen the stock market in more than four years.

    If you invest in shares, there's only one word to describe you…you're a lunatic.

    If you're not much keen on insults, don't worry, we didn't mean to insult you. It was a compliment. In fact, if you invest in shares today, you should embrace your lunacy.

    Because thinking about things in a way that's different from the rest of the crowd is the single best way to invest in shares.

    Read on and we'll explain what we mean…

    The Aussie S&P/ASX 200 Index has taken a hammering over the past month, as the chart below shows:

    The Aussie S&P/ASX 200 Index

    Since the peak on 12 March the index has fallen 4.9%. That's not such a big deal, seeing as stocks had rallied 25% between June last year and March this year.

    But the not so funny thing is, while it was the dividend paying stocks that gained the most during that rally, it's the growth stocks that are copping most of the slack as the market falls.

    In other words, growth investors have got none of the gains and all of the losses. Not fair.

    We've seen that with the stocks on our Australian Small-Cap Investigator buy list. Our biggest winners from the past six months are still sitting pretty, while the stocks that didn't get the growth spurt have taken some of the biggest hits.

    It's a trend we've seen across the whole market.


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