Build Wealth in the Next 2+Years from US Equities

November 16, 2008. Written by F. Gerrald
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Disclaimer: This article is strictly for educational purpose and not an advise on stocks to buy. Please do further research and due diligence before buying into any of the stocks listed in this article.
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The US stock market is currently the hottest market to invest in right now if you have at least 2years to wait. The discerning investor should be able to choose the losers from the winners as government has segregated the winners from the losers. The US government $700Billion bailout fund was pumped into selected companies and from all clear indications these companies represents the backbone of the US economy. They must succeed if the US as a nation must move forward. I strongly believe that the right time to invest in US stocks is now as the US government has nationalized more than 20 companies currently in the US. The Federal National Mortgage FNM is currently trading at $0.50 per share. This company represents a lot of national interest to the US government because it was a government initiated mortgage institutions to help organize the US mortgage industry. Currently the US government has 80% of this company equity and only 20% is open for FREE trading by investors. The FREE float has been cut considerably and with better liquidity in the US this stock can rise quickly into its previous year high of $56.72 per share. This is more than 10,000% capital appreciation.

What this means is that an investment of $1,000 in FNM has the potential of becoming $100,000 in the near future. The security is high as the company is currently under US government control.

There are many others like FNM which the US government has taken over 80% equity and control. The Federal Home Loan Mortgage Corporation (Freddie Mac) FRE, and American International Group AIG are among the hottest stocks trading below $5 with previous year highs above $50 per share.

See detailed list of others about being nationalized or already nationalized by the US government.

* Federal National Mortgage FNM
* The Federal Home Loan Mortgage Corporation FRE
* American International Group AIG
* Citigroup Inc. C
* Regions Financial Corporation RF
* Bank of America Corporation BAC
* Citigroup Inc. C
* UCBH Holdings Inc
* Valley National Bancorp VLY
* Comerica Inc CMA
* Huntington Bancshares Inc HBAN
* Washington Federal Inc WFSL
* First Niagara Financial Group Inc FNFG
* State Street Corp STT
* Goldman Sachs Group Inc., GS
* The Bank of New York Mellon Corporation BK
* SunTrust Banks, Inc STI
* Wells Fargo & Co WFC
* JPMorgan Chase & Co. JPM

The US government has bought deeply into this companies and the amount their cash injection into these companies is below:

* Capital One - $3.55 billion
* SunTrust Banks - $3.5 billion
* Regions Financial Corp. - $3.5 billion
* Fifth Third Bancorp - $3.4 billion
* BB&T Corp. - $3.1 billion
* KeyCorp - $2.5 billion
* Comerica Inc. - $2.25 billion
* Northern Trust Corp. - $1.5 billion
* Huntington Bancshares Inc. - $1.4 billion
* First Horizon National Corp. - $866 million
* City National Corp. - $395 million
* Valley National Bancorp - $330 million
* UCBH Holdings Inc. - $298 million
* Washington Federal Inc. - $200 million
* First Niagara Financial Group Inc. - $186 million

Building an Investment Plan

The wisest way to take full control over your future investing in the US marked-down priced equities is to develop a monthly recurrent investment structure where you invest a small portion of your monthly income into the nationalized companies in the US. If you are setting aside some fund every month, in no less time you would have bought all the listed stocks in your portfolio.

Even seasoned investors and world leading investors are publicly telling investors to start investing now into the US stocks now. Doing so gives you a piece of the US future which Warren Buffett says is very bright. Read Warren Buffett's New York Times opinion piece below:

Warren Buffett wants the world to know that it's time to get greedy right now, as fear sends stock prices plunging across the globe.

Using the widely-read opinion pages of The New York Times, Buffett writes that he's been buying U.S. stocks for his personal account, picking up a "slice of America's future at a marked-down price."

Besides his Berkshire Hathaway shares, Buffett reveals that he used to own nothing but U.S. bonds. Now, he writes, "If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent" in American stocks.

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors."

While he acknowledges that the financial world is a "mess" and the economy will only get worse in the near term, he argues that over the long term, "the stock market news will be good," just as it has been throughout the 20th century. All the bad news right now creates opportunities for investors willing to look two, five, or ten years into the future.

Buffett admits that he doesn't have the "faintest idea" whether the stock market will be higher or lower in a month or a year, he argues that it's likely the market will move higher well before we see improvements in investor sentiment or the economy. "So if you wait for the robins, spring will be over."

It's no secret that Buffett remains optimistic about America's long-term financial future and thinks "people who own a piece of it will do well."

It is, however, unusual for Buffett to make such an emphatic public declaration that the time to buy is now. He never likes to "opine" on the stock market. These must indeed be extraordinary times for him to say to the world that he's putting his own money where his mouth is right now, by purchasing his own pieces of America's future prosperity.