3 Reasons Why You Need To Buy Stocks Right Now

Stocks are an interesting investment choice. For a lot of people, they have been seen as high risk gambles. And while the past few years (actually the past decade for those of us who actually keep track of long term trends) have not been all that kind and rewarding to stock investors, there are several indications that this next decade will be more accommodating to domestic stocks than any other asset class. Long-term forecasts aside, here are three "right here, right now" reasons why stocks are the smartest investment an investor can make... today.

1. Yield Curve. Arguably one of the most important and obvious tools in the bond investor's toolbox, yield curve tells investors where the economy is heading. Although many new and ignorant investors have been jumping into fixed income investments while turning their back on equities recently, the yield curve confirms that stocks are where investors should be heading. Looking back almost 20 years when the last "steep" yield curve occurred, stock investors were rewarded with double digit gains... bond investors on the other hand, were no so happy.

2. Fundamentals. While a lot of press has been eagerly pointing out some of the worst shortfalls of our current economy, the reality is that a lot of big domestic corporations are enjoying aggressive growth, positive revenues and definitely tremendous cash flow. Not sure about that? Consider conglomerates like GE increasing their dividend. Look at the Mergers and Acquisition activity that has seen two huge domestic computer manufacturers (Dell and HP) bidding up the price for 3Par. And look further, beyond our shores, at the fact that this latest quarter (2Q10) being the hottest for oil industry mergers and acquisitions. If companies were not doing better and gearing up for some serious global growth, why would the fundamentals tell such an aggressive story?

3. Contrarian-ism. Consider what happens in bubble situations. Look at the recent real estate bubble for instance, with people with no supporting income (or no income at all) buying homes. What happened within a couple of years? Housing prices fell through the floor. Not convinced? Look at oil prices leading up to 2007. What happened when everyone started buying and prices reached $150 per gallon? The price dropped to $40 or so and would still have to double before it reaches those old highs. Still not convinced? Look at the tech bubble of the early 2000's. Wherever you look, look at today's reality: people are dumping domestic stocks and looking at emerging markets and, worse, bonds! Go against the crowd on this one.

These are three very tangible reasons why investors need to take a close, hard look at increasing their domestic stock exposure if they want to enjoy several years of positive returns. This is not a difficult thing to do once investors can see beyond the "news" reported in the papers and on television and make the smart investment decisions that history has told us time and again will be the highly rewarded decisions in the long-term.