Why You Should Be Buying Right Now

October 30, 2008

Reasons to Buy

First, no matter who wins next Tuesday’s election, Wall Street will celebrate that the election is finally over. Investors just want to finally know who’s going to be in charge for the next four years, and they don’t care anymore whether it’s a Democrat or Republican. Typically, every new president gets 100 days to lead before the criticism mounts, and the market usually gets a lift in this period. This time around will be no exception. That’s why I’m expecting a big rally after the election, but by mid-April, if our new president and Congress aren’t working well together, the market could have an ugly relapse.

Another reason to be bullish is that we’re about to enter the seasonally strong time of year. The stock market is much healthier between November and April than it is between May and October. Consider this fact: If you had invested in the S&P 500 on May 1 and sold on October 31 every year since 1950, you would have actually lost money. But if you had invested on November 1 and sold on April 30, you would have made over 2,200%! That’s an astounding difference, and the facts don’t lie.

Why does this six-month happy streak exist? Some analysts think that people cheer up during the holidays and the optimism carries over into the New Year. Others say that it’s due to year-end pension funding. Personally, I think it’s a little bit of both. The other key to the November to April period is that small stocks typically do very well, and that’s the kind of stocks we love at Emerging Growth.

Find out the small-cap stocks I think are ready to surge by signing up NOW. Take advantage of our $99 special offer and get ready to profit this holiday season!

Looking back at the last month, it’s clear that the market briefly went insane and investors dumped stocks no matter how good the companies were. At Emerging Growth, we have a rule: We only buy stocks that are growing their sales by at least 25% a year and their earnings by at least 50% a year. There are no exceptions. Since the economy has slipped into a recession, I’m obviously having a harder time finding stocks that meet my strict criteria. The list of quality stocks in getting smaller so only a handful of companies will generate big profits as the rest of the market lags behind.

Since Monday, several of our stocks have been showing huge gains. In just three days, our average stock is up 13%. Leaders this week include Flowserve (FLS), Compass Minerals (CMP) and Whiting Petroleum (WLL), all up more than 30%! These are the kinds of profits that are waiting for you at Emerging Growth.

In the November issue of Emerging Growth, I’ll have two new buys that could very well double this performance. One of the new stocks is an entertainment company with soaring earnings that’s practically a monopoly. The other new stock has Wall Street analysts tripping over themselves to raise estimates as profits have jumped 80% in the last four quarters. There’s no recession for these two picks! I can’t give out the names yet, but if you sign up today, you can read all about them in our November issue.

A final note: There’s over $4 trillion in cash on the sidelines waiting for the right time to come flooding back into the market. These small-cap gems are certain to be at the top of the list for investors once the buying party begins, so make sure your portfolio is ready to ride the surge. Sign up for Emerging Growth today!

I’ll have the next issue of What’s Working on Wall Street Now on Thursday, November 6. 

Sincerely,

Louis Navellier