Fad Investing

crocs 100x100 Fad InvestingThis article originally appeared on The DIV-Net

About two years ago I was speaking to a friend who was very excited about an investment opportunity. “This company is a sure thing, my kids all have these and I see Oprah was wearing a pair of them last week so they are going to have a huge quarter.” He was right and saw his money double, and then a year later fall 20% below what he had paid for it.
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Buy What you Know: A Recipe for Investing in Tough Markets

Lightbulb Buy What you Know: A Recipe for Investing in Tough Markets
“Buy what you know”, this quote first coined by Peter Lynch has been interpreted a number of different ways throughout the years. I am going to add to that list and suggest there is a way to interpret it in this economy and secure your investments.

During the stock market crash of 1929 almost all companies plummeted, but some investors still profited by picking companies that could make money in the economy of the day. If some of the dire predication about how long the current recession will continue are correct we may be entering a similar phase. So what companies are setup to make money when times are tough? Companies that serve our core human needs.
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