Changing times create opportunity, but only if you and you're 300 Club members are prepared to seize it

When confronted with change, investors have to make a choice - panic or prepare. Most do the former when they should do the latter. Which is why I say that now is not the time to worry about “getting over it” but to seize the moment and “get on with it??????"

Let me be more specific.

1. Don't fall prey to the coulda, woulda, shoulda crowd and don't believe everything you hear on the boob-tube. Wait for the facts to emerge. Despite the fact that we've had a solid rally for a while now, as the "stress test" results revealed earlier this week, there is still a mountain of work to be done before anything even remotely resembling actually prosperity returns. So concentrate on what is...not what may be.
2. Every stock is not alike and what you don't want above all else right now is to wind up paying cold hard cash for stocks that are still clearly trash. The best choices throughout this crisis remain those companies with real products, real earnings and solid sales growth, particularly those with exposure to China. Not only have such companies proven more stable during the entire financial crisis, they're also likely to continue to out-accelerate the broader markets into a recovery (even if the current rally falters).
3. If you've been to the pity party, snap out of it. There is still plenty of money to be made but you have to know what you're after and why. Ask yourself, do you want to earn a specific level of income or would you like to capture a specific $ amount every month in appreciation? What is your target return this year and how will you know if you've achieved it? Don't invest another dime until you can answer these questions and know exactly what role your existing investments play in your financial future.
4. Once you've gotten this far, identify what you need to do to meet your objectives and which areas you need to flesh out. Write this down on a scratch pad or in a journal. I use sticky pads on my monitor. Doing so will help you think more clearly, invest more efficiently and produce consistently higher gains with fewer losses.
5. An example might be "I will invest only in dividend aristocrats showing offering a yield of 4% or more annually and which have increased their dividends every year for the last 10 years." And yes, before you ask, they are out there...
6. Guard your gains. When the markets start to run, it's easy to forget that stocks are most vulnerable during the early stages of a rally when things remain uncertain as they are now. So make sure you have trailing stops in place for every new purchase and stick to them. That way, if the rally fails you can easily head for the high ground while others have their dinner dropped in their lap.

Best regards for great investing,

Keith

Editor's Note: If you think the Obama administration's $3 trillion in stimulus is a lot of money, you're right.

A stack of 3 trillion dollar bills would reach three-fourths of the way to the moon. So imagine how much pure cash is being made in a secretive market - totally unrelated to stocks - where huge banks and billionaire traders exchange $3 trillion every single day.

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