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Sunday, July 30, 2006
Dr. Weiss's Stock Market Recommendations: Sell These Stocks Now
From the Weekend Edition of Money and Marketsby Weiss Research, Inc. Martin here with an urgent update on stocks that are getting killed right now and what you should do about it.
Just this week, for example, Countrywide Financial, a major mortgage lender, fell out of bed.
Meanwhile, Fannie Mae, the worlds most indebted mortgage company, has seen its share price plummet nearly 16% in four months.
Investors are losing still another fortune in the shares of Toll Brothers, a high-end home builder, already down a whopping 32% ... and in Centex, another housing player down 15% just since May 8.
Many U.S. technology stocks are also getting killed, just as Tony Sagami has been warning you. The main reason: With higher interest rates and stagnant home values, homeowners cant tap their home equity any more to buy electronic goodies like they used to.
Take Dell Computer, for example. It was selling for $41 one year ago, $33 just three months ago, and now its selling for about $21 per share.
The declines in all of these stocks are taking place right now. And they are continuing whether the Dow is up or down. Regardless of what happens in the broad market, these sectors are in their own, private bear market.
What to Do Immediately ...My First Recommendation: With the housing market crumbling and interest rates already pounding these sectors, now more than ever before make sure you keep a big chunk of your money in safe investments. My favorite vehicle: Short-term Treasuries or money market funds specialized in Treasuries.My Second Recommendation: If you own the natural resource stocks weve been recommending, stick with them. Unlike the vulnerable sectors Ive been telling you about here, stocks like these stand to benefit from the same forces that have driven interest rates higher rising natural resources and inflation. My Third Recommendation: If you still own shares in interest-sensitive sectors like mortgage lenders or home builders get rid of them immediately. Theyre destined to fall much further.My Fourth Recommendation: Sell U.S. tech stocks, especially those that cater mostly to consumers. Already, just since the beginning of April, the Nasdaq has fallen as much as 13%. More declines are coming . . . .This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.MoneyandMarkets.com
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