What a June Swoon!

A new month is here. And thank goodness! There wasn't a lot to be cheerful about in June, after the stock market suffered its worst monthly decline in more than half a decade.

The S&P 500 lost 8.6% in June and the Dow shed 10.2%. It was the worst monthly performance for both indexes since September 2002, and the worst June performance for both the Dow and S&P since 1930.  During the month, 91% of the industries in the S&P 500 declined, with almost all of those falling by 10% or more.

And even aside from the past 30 days of havoc, it hasn't been a very encouraging first half of 2008, has it? Driving down the market all year has been the weight of huge losses at banks and securities firms. From Morgan Stanley (MS) to Goldman Sachs (GS) to Wachovia (WB) to Citigroup (C), billions in writedowns have been announced all year. And while I'm still 100% sure investors can make money in this market, I'm afraid the financial sector will continue to tank and drag on Wall Steet.

I'm not trying to scare you. I just want to be honest so you don't get burned in a bear market rally, where wishful investors dive in hoping to ride a market turnaround to big profits. Instead, the bottom falls out again and they're left with even bigger losses.

If the second part of this year is anything like what we've seen in the first two quarters of 2008, more bigwigs could be on the chopping block in the financial sector as investors demand accountability. We're also likely to see losses yet again in earnings reports from Lehman Brothers (LEH) and others who took such a big hit after offering adjustable rate mortgages to risky borrowers or buying complex mortgage-backed securities. And since all this turmoil is scaring the financial industry, lenders are only offering money to those they are sure will pay them back–and meager payouts is sure to equal meager returns.

You may think the fact that I'm confident investors can make money in this market means I'm nuts. But I'm not, and here's the proof. Take the stock AZZ Inc. (AZZ), which just reported quarterly earnings. It's up 22% in the month of June! So while the rest of the market was in a downward spiral, AZZ continued to grow–just like it has since I first alerted my Emerging Growth subscribers to this stock in December of 2006. Since then we've more than doubled our money!

So while the financial sector is certainly a drag for most investors, if you're smart you can put your money behind the stocks that don't suffer in this difficult market environment. Find out what other great stocks I'm recommending my subscribers by signing up for Emerging Growth today!