If you're like most investors, you probably spend most of your time searching for the "next" Apple Inc. (Nasdaq: AAPL
) or next Google Inc. (Nasdaq: GOOG
) - in other words, the next big winner.
But finding winners is only part of the equation.
If you're looking to build real wealth, you need to avoid the really big losers - like the "next" Enron, or next Lehman Brothers Holdings Inc. (PINK: LEHMQ
Portfolio killers like those are the stocks to avoid at all costs.
Let me explain ...
How to Win By Not Losing
During my years as a global merchant banker, advisor to governments, financial-news editor and trading-service specialist, I've time and again seen the big losses that can result from arrogant executives (Enron), greed-driven strategies (Lehman) and other investments gone wrong.
But what most investors don't understand is that the fallout from these losses reaches far beyond the losses themselves. You see, that's money that can't be deployed into winners.
As one longtime investing adage tells us, if you suffer a 50% loss on a stock, you need that stock to double in price (a gain of 100%) just to get back to even
And let's be honest: How many times has one of your stocks doubled - after it took that kind of a beating?
There are many strategies you can use to protect yourself from big losses. Just last week, for instance, I showed you how to bolster your portfolio
by investing in companies with strong growth prospects and a record of consistent dividend payouts.
I call those companies "Alpha Bulldogs" - and recommend the shares of the strongest performers to subscribers of my Permanent Wealth Investor
In last week's report - "Investment Protection: These Dividend Stocks Yield Twice as Much as Treasuries"
- I discussed two specific "Alpha Bulldog" stocks: B&G Foods Inc. (NYSE: BGS
), and a second whose identity was withheld specifically for the charter subscribers
of our newest premium advisory service - Money Morning Private Briefing
But as I noted above, finding great investments is only half the battle. In the work that I do for my subscribers, I must also avoid big losers.
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