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Buying Value Cuts the Illusions of Fear.

 If someone buys a stock and later sells it out of fear, then they had no right to buy the stock in the first place. Fear is an illusion, all-be-it a very persistent one. As long as the fundamentals of a company do not change for the worse, selling because of fear mongering headlines is not recommended. Rather, buying good value stocks when fear is at an extreme has always paid big rewards.
 
There is no doubt that the fear mongers have the media attention right now and it may stay volatile in the summer months. However, with the fear based sell-off in May, many value stocks seem like a good buy.

Only folks who believe the end of the world is near will talk about stocks falling out of bed and gold is the only safe heaven.  History has proven this fallacy to be nothing but a chain letter myth. The ones who hold on too long to gold may well be the suckers who fall for the golden mythical bait.
 
After all is said and done, value stocks will out perform and Warren Buffet is a prime example of that truth. Here is an example of questions a six year old will have no difficulty answering, but they may stump clever fear mongering experts, who cannot see the valuable woods for the fear laden trees.

• With six billion people in the world ... Will people in work stop buying computers, and cell phones?
Also, who are the companies that make the best?
Also who are the companies that provide the best service and do any pay good dividends?

• Will people still get old and will they need more and more medications? If so, how cheap are the pharmaceutical stocks?

• Will people still need to put gas in their car and how cheap are the leaders in that industry?

• Will people still need to eat, if so, how cheap are stocks in that industry?

These questions are only a small sample of many. They may seem a little dumb to a six year old, but clever experts are giving their fear driven negative slants as though people are going to stop enjoying themselves with all the modern day trappings. Money may be only the icing on the cake for describing a successful lifestyle but people will always have a sweet tooth.

Most folks still have a job and the mayhem and confusion will pass. Provided earnings keep exceeding expectations stocks will continue to rise. The smart people who understand you have to time the market to buy low and sell high will be enjoying the aroma of prosperity that started when they bought stocks from a fear based low point and averaged down if the stocks went lower. 
 
Wise investors understand to sell stocks when reach a level that they are satisfied with without waiting for a home run. The time to sell is usually when the doom and gloom experts change lanes, and they all start to say it is time to buy because the future looks bright and the PE's are trading at the low level of 18 times future earnings ... So, Enjoy the sweet aroma of value investing as it cuts through the illusions of fear mongering headlines!


Disclosure: Long large cap stocks in sectors mentioned