Moments of Fear Offer the Greatest Opportunities
Today, the Federal Reserve raised rates by 0.75%.
And over the past few days, I’ve been asked…
“Charles, will you change your approach to stock investing now that interest rates are rising?”
My response is simple and to the point…
Because no one can accurately predict interest rates, the economy or the stock market.
Many have tried, and some have had success over the short term.
But over the long term, it’s impossible.
And that’s just not me talking…
A Fool’s Guess
Legendary investors like Warren Buffett, Ben Graham and Peter Lynch have all come to the same conclusion.
Economies and markets are complex.
There are many different variables that can change unexpectedly.
So, any prediction is just a wild guess.
And you’d have to be a fool to invest based on guesswork.
Charlie Munger, Warren Buffett’s business partner, said that one should: “Be a business analyst, not a market, macroeconomics or security analyst.”
And I totally agree…
Real Talk readers like you know that I ignore political and economic forecasts.
They’re distractions. And distractions like them can be very costly for an investor.
To make money in the stock market, all you need to do is identify great businesses and then buy them at bargain prices.
Nothing more complicated than that.
There will always be events that impact the economy and the stock market — both expected and unexpected.
Bottom line: At the end of the day, whatever the Fed does next to rates really doesn’t matter to us…
Over the long term, we’ll make more money during periods of market dislocations.
In fact, as Warren Buffett said: “Fear is the foe of the faddist, but the friend of the fundamentalist.”
So, times of market panic are actually when you can make the best purchases.
They give us the opportunity to buy great businesses while they’re selling for even greater bargains.
And some of the best opportunities during this current panic are spinoffs…
Spinoffs give everyday investors like us an edge over Wall Street thanks to a glitch in the market.
That’s why they’re my favorite stock catalyst.
It’s also why I put together a special presentation on how to look for the best spinoffs — including my No. 1 spinoff for 2022.
I just released it at 4 p.m. today. So, click here or on my face below to make sure you don’t miss it.
Founder, Alpha Investor