Why I Love Financials Right Now

So....I don't usually talk much about buying individual stocks. My philosophy is typically to buy index mutual funds and hold. But sometimes I feel certain stocks or sectors just look too good to be true. That is how I feel about financials right now and this is why I will be putting my 2008 IRA investment into either selected financials or a financial ETF.

Let's look at some financial stocks in pictures:

As you can see financials are getting BATTERED right now. And for good reason, as we have talked about ad nausem, these banks made terrible bets on the subprime mortgage market and are hemorraging money right now. This discussion does not center around fundamental analysis of these stocks. I think they are very hard to value right now. I don't know how much further these stocks have to go down. I don't think we are at the bottom. But my gut, and I purely am going by gut...says that the US government WILL NOT allow the major banks to go under. These stocks are trading as if the subprime crisis will permanently impair their earnings. I don't believe that to be the case.

I don't gamble because the house never loses long term. Similarly, Wall Street never loses long term. I am betting on the house on this one. I am a contrarian investor and I see opportunity.

Please contact Dollars & Sense Education to bring our seminars to your company or organization!