How to invest amid bad news

Doesn't it always seems like the news is much better at telling you where the trouble is than giving you helpful tips on how to invest? It sure did the first two days of this week, with gloomy stories about two top companies in the financial and auto industry. On Monday, Wachovia CEO Ken Thompson said he'll step down at the request of the bank's board. Then on Tuesday, GM announced plans to close four pickup and SUV plants.

Six months ago, Wachovia stock was cruising in the low $40s. Now it's half that, after Wachovia reported a surprising first-quarter loss of $350 million. GM's hit was almost as bad in the same period, losing $3.3 billion in the first quarter of 2008.

Anyone with a TV, internet access or a newspaper can tell you why these industries are hurting: The housing crisis and resulting credit crunch, and surging crude oil prices and the resulting push for more fuel efficient vehicles. But I'm here to tell you how to profit.

How to invest for the future

What good does all this bad news serve you as investor? Sure, it continues to drive the point home that certain industries aren't to be touched with a 10-foot pole, but how do you make money?

Well, you have to get much more information that just what's displayed in stock prices and headlines. I advocate a strategy called "growth investing." At its simplest, growth investing is picking healthy, vital, growing companies using a variety of measurements. These are the companies that are driving the economy forward with their sales–and often their innovation. It's a potent strategy for building wealth I've used for over 27 years. This method consistently gives members of my Emerging Growth service returns that beat the market at least 4-to-1!

For instance, anyone can see how crude oil prices are taking a bite out of the auto industry. But did you know that this same trend is responsible for Oceaneering International (OII) giving back my Emerging Growth subscribers profits of almost 83%? It's true!

Check out my PortfolioGrader Pro tool to get an idea of how I use eight fundamental characteristics to rate companies. And check out my Emerging Growth service for proven advice from me on how to invest successfully!