When the Optimists Become Pessimists

First, let me start off by saying if you are truly interested in managing your own money, and I believe you should be, you have to do some reading. I do tons of it, not only because it helps to create a better picture of what is going on In the investment world, but because I enjoy reading.

For me, reading is a way to learn, to increase knowledge. Since elementary school I have been an avid reader of mostly non-fiction books. In fact I remember one teacher made me select a fiction book as part of my book report assignment in an attempt to "broaden" my horizons.

Today I do enjoy reading an occasional fiction book, but the majority of my reading continues to be non-fiction.

For those of us who care deeply about our money and the protection of our assets, reading takes on an even greater role. It is how we discover trends and techniques to increase our returns while protecting our assets.

A key part in developing a list of resources to read involves reading material that you may not agree with. Writers who come from the other side of the investment fence still provide some interesting, thought provoking material. It is this material that allows us to maintain balance. If all we ever read focused on our narrow views of the world, we would never see the changes coming. We would believe our viewpoint to be the only view and thus lose some valuable insight into what others are seeing and doing.

With that said, I read from several authors who I do not always agree with and I believe that it results in a more rounded world view and better investment decisions. One such author is John Mauldin. Visit him here at Thoughts From the Frontline. John is decidedly optimistic in his opinions regarding the economy. About the most negative view his has ever taken when it comes to his predictions is his "Muddle Through Economy" comments. He believes that things will not be tremendous but that we will get by.

He has remarkably good insights and he reads even more than I do, so his newsletter is a must read every week. I am in good company as his newsletter boasts 1.5 million subscribers now.

I bring John up today, not for the shameless plug for his newsletter, as he is not even aware that I exist, but rather because last Friday John made what I believe to be an important statement in the second paragraph of his newsletter. He says "that it is high time for you to start thinking about taking a defensive posture on your stock market investments." That is about the most negative comment I have read in the six or seven years that I have been following him.

If you have read any of my past posts here, you will know that I have been recommending such a position for quite a while. My hope is that you will take my warnings a little more seriously. When a mainstream optimist becomes a pessimist, it begs consideration.

Using our Risk Adjusted Asset Management System (RAAMS) we have been positioned defensively with only minor adjustments since October of 2000. The results, 162% over the past five years, indicate that our system works and works quite well. If Mr. Mauldin's warning becomes reality, we are set to see wonderful gains this year, while protecting our investments. To receive a free report about our soon to be released RAAMS version 3.0, click the link below right now.


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