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Which Pays Better, Popular Investing or Staying In Front Of the Crowd?

By: Steve Johnson

1/5/2009 - 41 Comments

I am often tempted to write articles about popular investment strategies on this blog to gain more readers.

I could write about how the stock market rally is just around the corner and how everyone should continue to invest in their 401k through the recession and how dollar-cost averaging will produce big gains when the market rallies back. 

Or I could write about how most recessions only last 6-12 months at best and how the US will recover faster than other markets because we were the first ones into the recession and the world depends on our consumption. 

But, if I did that, it would only be for the short sighted gain of telling the masses what they want to hear.  The payoff would be an increase in blog readers, which would increase my blog income.  But, I just cannot do it because I would have to follow my own advice – which would lead me to lose more money than I would gain from the increase in blogging income.  I’m not trying to pick a fight with other personal financial bloggers who blog about these things, because many of them believe in what they are blogging about and that’s all you can ask for. 

The question for me is “Which pays better, popular investing or staying in front of the crowd?”

And the answer has been, “staying in front of the crowd”.  For example, at the end of last year I moved my entire 401k into bonds, which was not a popular move at the time but saved me from losing a lot of money in stocks.  It’s not to say that I’ve always been right about the economy. 

Back in 2001, I was day trading and everything was going up right up to the day I started losing money.  I didn’t see the dot-com bubble bursting before I lost some money.  I did manage to get out before I lost too much, but missing that bubble has helped me educate myself about economic swings and just how much the government’s actions are effecting the markets.

Over the last year or so, I have become a gold nut as I see tremendous weakness in the dollar and massive inflation coming from the government actions.  Yet, gold is not a popular position at this time, but I think it’s going to become very popular over the next few years.  And when it becomes really popular, I will be selling gold and buying something else that will probably be much less popular at the time. 

Long-term I don’t think it pays to blog about the popular investments or even the latest financial news, because readers can read about that stuff from everywhere else.  Therefore, I plan to continue blogging about opportunistic and often times unpopular or uncommon investment strategies and new business opportunities that are still on the horizon. 

It’s easy to see what's going up today, but much harder to see what's going up in the future. That’s where the real gold can be found and where I plan to continue focusing.

This week I participated in one blog carnivals

They did an excellent job and as usual, there are tons of great articles. If you have the time, I highly suggest you skim through this week’s carnivals.

Carnival of Personal Finance #185: Cheesehead Edition

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