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Reader Questions Answered

In the past 12 months we've witnessed a series of market events that most of us would never have imagined possible, including violent trading swings, the failure of brand-name financial institutions, frozen credit markets and world leaders caught unawares and rendered powerless. Little wonder it remains unclear just when, or how, the markets will hit bottom.

The key is how we handle things in the meantime.

As you might expect, I've been inundated with questions, comments and suggestions in recent weeks and I'd like to share a few of them with you today that cover your biggest concerns:

It's Time to Share

Reader Comment: In response to last week's message on postponing my Ironman dreams, Diane R. wrote to remind us that in a world where so many people have become marginalized and dropped through the bottom, it's important to not only pare down, but to do so by sharing our abundance with those who have nothing.
Keith's Response: I couldn't agree more. In fact, when I've talked with people who lived through the Great Depression or survived the immediate aftermath of a catastrophic events like WWII or any of half a dozen natural disasters, sooner or later the conversation turns to sharing as an important part of the healing process both emotionally and financially. Not only does the act of sharing help us get through adversity individually, but it helps us maintain a healthy respect for each other and that serves us collectively. Thanks for the reminder!

Courage When Days Are Darkest

Reader Comment(s): Victor M., John A., and Matt C. wrote that "it's nice to see your advice goes beyond the usual good investment opportunities," calling last week's Money Morning missive "an excellent piece of work" with a "powerful, simple message."
Wrote one of the gentleman: "My wife and I hope that you do fulfill that China Dream one day, or one similar to it."
Keith's Response: Thanks guys. Your words harken those of Thucydides (c 460BC – c 395BC), who said that "the bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding go out to meet it." That's why it's important to not give up.
Studies show that even the most vicious bear markets eventually are replaced by a bull market. More importantly, these studies show that the investors who continue to put money to work when the days are the darkest (like now) tend to reap the biggest rewards. The historical record is very clear on this point: It's when people are the most disheartened that rebounds begin.

Respect the Unknown

Reader Comment(s): While the vast majority of readers found my comments last week reassuring, a few readers – like R. Greenhold – said they found my note somewhat "alarming." Mr. Greenhold wanted to know whether I "[knew] something special about how bad this is going to get and can I share it?"
Keith's Response: I don't know any more than the next person about what's coming. The difference is that, having spent two decades trading, I believe that it's important to face the  unknown head-on, and not run from risk. Instead, it's important to deal with it intelligently. And right now that includes a healthy respect for things I can't control …which is exactly why I postponed my China Ironman entry. I'd rather be safe and regret that I cancelled my race than be sorry I didn't if everything really goes to heck in a hand basket.

Common Sense Savings

Reader Comment: Patti R. enjoyed my "excellent e-mail" and observed that she'd "found that needs shrink to match income – 10% deducted by another party is never missed. Figure out what you need for what purpose each week, and put the actual cash away in an enveloped labeled for each purpose. It's worked for me for years."
Keith's Response: Great idea, Patti. Here's an additional tip: By converting the cash to traveler's checks, we not only force ourselves to save, but we also hedge against our money getting lost or stolen.

Denial Is Not a River

Reader Comment: One reader, who opted to not sign his name, I was chastised for thinking people spend their weekends "caring about money."
Keith's Response: Guilty as charged. I find that most people actually appreciate a few quiet minutes to think about important topics, and one of those important topics is money – especially right now. And I receive plenty of feedback from readers all over the world confirming this.

In closing, there's no doubt the world has changed but, during periods like this one, it's important that some things have stayed the same. Success will come from sticking to our plans and to each other. Perhaps the single worst thing we can do right now is to try and go it alone.

Best regards,
Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

[Editor's Note: As Investment Director Keith Fitz-Gerald's commentary underscores, uncertainty has been the watchword in the whipsaw markets of recent months. Just when it seems as if clear patterns have emerged, another bad-news revelation seems to jump up out of nowhere to roil then markets anew. But what if you knew what that next "revelation" was going to be? And you had enough time to prepare a strategy to tackle this new development – or, better still, someone also handed you a strategy with which to capitalize on this event. Money Morning's latest investment report does just that: It predicts five key "aftershocks" that we expect will emanate from the U.S. financial crisis, and talks about the opportunities for substantial profits that will flow forth from these "seismic" market events. Indeed, we're so excited about the potential for these new predictions that we've actually launched a news series to watch as they unfold in the weeks and months to come. To read the first installment, check out "The Five Financial Crisis "Aftershocks" Investors Can Play for Profit." Make sure to watch for additional installments. And in the meantime, take a look at our full research report on aftershock investing.]

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About the Author

Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean. In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.

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  1. Tomas Gold | November 22, 2008

    Hi Keith,
    if one of this days you are looking for chalenge try biking the Silk Route, or Tour d'Afrique. My brother offers those cycling expeditions .
    Check his web site, http://www.tourdafrique.com
    Regards Tomas Gold

  2. H. Craig Bradley | November 22, 2008

    I don't buy the Cum-bi-ya stuff. Modern (urban) society is still relatively unchanged. People have not changed that much, neighbors are not necessarily more neighborly.

    Sharing; sure we all need to tithe, but privately and in our customary manner. Remember, voters have made some choices. (I was outvoted on more than one occasion). Don't come crying to me if things consequently turn out worse because of poor collective choices.

  3. H. Craig Bradley | November 22, 2008

    Sharing; sure we all need to tithe, but privately and in our customary manner. Remember, voters have made some choices. (I was outvoted on more than one occasion). Don't come crying to me if things consequently turn out worse because of poor collective choices.

  4. mike | November 23, 2008

    Dear Mr. Fitz-Gerald,

    Thank you for the time you spend on your excellent writings for Money Morning and your financial expertise. I enjoy reading Money Morning each day, but I do have an issue with your latest piece. While I can appreciate your sacrifice in postponing your Ironman dreams, I had to chuckle a bit since that is like postponing a luxury and not anywhere near the crisis events of say; postponing surgery because you don't have medical insurance due to a job loss, postponing the filling of your prescription drugs because you need to pay the heating bill, or postponing your next meal because your social security is spent for the month. Yes, all sacrifice is individual, but your postponing of a China Triathlon seems so trivial compared to many realities.

  5. Brendan ODonnell | November 24, 2008

    Dear Keith, I noticed one of your respondents was wondering what secret info you may be harbouring and if you would share it. I think this was a naive question that should probably have been directed to the gentleman who wrote this news article last week- the link is below. The story was in the "business spectator" under the headline "Tsunami Of Hope or Terror". I found this story completely alarmist and irresponsible. How can we share reassurance, comfort and goodwill when speculation is thriving at fever pitch? The gent who framed his original question to you was probably so mesmerised by events, you could probably imagine him with a glazed look in his eyes as he asked it and many other mute questions.
    Brendan ODonnell, Australia.
    http://www.businessspectator.com.au/bs.nsf/Article/A-tsunami-of-hope-or-terror-LHRJP?OpenDocument&src=mp

  6. Marge | November 24, 2008

    Re: Jim Rogers Report!!!!!!!! I saw this report months ago before the crash….how it relates to the market then and how it relates now is so-o different. How about DATING ALL REPORTS. THIS IS VERY IMPORTANT. PLEASE DATE, DATE, DATE YOUR REPORTS. Thanks.

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