Dividends4Life: Focus on Value and Ignore the Panic

Focus on Value and Ignore the Panic

Posted by D4L | Sunday, May 30, 2010 | | 0 comments »

The plunge in markets worldwide is starting to open up some bargains for long-term investors. As usual, you should ignore the panic around you and look for solid value. Don't worry what the other guy is doing: Worry about your own money. I don't think stock markets overall are cheap yet, so I wouldn't be an indiscriminate buyer, even in this rout. But there are opportunities. If you stick to quality you should do well over time.

And if you want to get an extra 15% off the price of the shares you buy, take a look at some closed-end funds. Closed-ends are regulated, professionally-managed mutual funds just like the Vanguard or Fidelity ones everyone knows about, but with one twist: Shares in closed-end funds trade on the stock market, like those in, say, Apple or Exxon. What that means: You can sometimes buy shares for less than the value of the fund's underlying holdings. That's like buying $1 worth of investments for 85 cents.

Source: Wall Street Journal

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