Stockerblog.com had the pleasure of interviewing Natalie Pace, head of her own financial publishing and media company, and author of the book Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker. She has been a repeat guest on Fox News, Forbes on Fox, Good Morning America, Time Magazine, USA Today, Kiplinger's Personal Finance, and other financial news media. If you missed Part 1 of the interview, you can check it out here.
Stockerblog.com: What was your biggest investment mistake and what did you learn from it?
Pace: I intend to do well in investments because I take a long-term view of investing. So for instance, my home did go under water. When I bought it, I bought in 1991, experiencing earthquakes, fires, floods, riots, and mudslides, so I was really waiting for the locusts to come. I believed in my home, I had bought it for a good price, I believed in my neighborhood. It was a condo in Santa Monica, it was a good long term investment. So in the short term, it was underwater. There people were coming in and buying one of the condos for half of what I had purchased mine for. I didn't get fazed by it and I held on for the long term, and it didn't even have to be that long. I had pride of ownership, I still lived there, and I made a good ROI when I did sell.
If I had freaked out, and you have earthquakes, fires, floods, riots, and all those other things in a two year period, you can really freak out, if I had been the kind of person who had been ruled by stomach acids, I would have lost money if I had gotten out and sold at that time. The big lesson was to do your research up front, make sure you really believe in it, and be able to get through any storms that might arise between you and your ROI.
Stockerblog.com: Since you've written your book, have you come up with any new bits of advice?
Pace: Yes, because the book was written over a year ago. We were in the galley stage before the crisis hit. The strategies in the book are exceedingly helpful. The book says to diversify into ETFs because mutual funds are too big, they are not real diversification, and rebalance your portfolio twice a year. That strategy is amazing. If people just did that, they would be so protected, because one of the themes is always keep a percentage of your age safe.
Now the important thing to remember also, is to get a really great source for ongoing investment information. In February 2008, I had a huge article, Recession Proof Your Nest Egg Now, and that article had a key recommendation, take an additional 20% safe. I talked to one couple where I drew a pie chart on a napkin, using the pie charts from the book, and keeping an additional 20% safe during the recession, and they have lost nothing. So it's really key to have ongoing sources.
In two years, we will probably be coming out of this recession, and you will want to make sure you are not over-weighted safe, and you will probably want to be over-weighted in another industry. So it's really important to have ongoing news and a basic great strategy. Clean energy is still going to be a great industry to invest in. Each year, the hot industry changes.
Stockerblog.com: Do you think that we are close to a stock market bottom?
Pace: No, not at all. I do believe that 2009 is going to be another rough year. I think its really important to make sure you have a game plan that is both offensive and defensive. People should be aware of the fact that no matter what anybody says, you should have the ability to overweight and underweight. So you can be safe this year, not losing is winning. People are starting to worry about inflation, that is probably on the horizon, but I don't think it happens yet. I think people should be concerned about getting safe, I think they should be concerned about properly diversifying, and they should have some game plan on the four industries that I think are going to be hot this year, and that would be gold mining, clean energy, Australia & New Zealand, and biotechnology.
End of Part 2 of the Interview. Part 1 can be found here.
Her latest book, Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker is available at Amazon. You can also check out Stockerblog's review of the book .
Interview by Fred Fuld at Stockerblog.com