Thanks to Bizzywomen.com for submitting this article.

Over the past 14 months, drastic market falls have caused many investors to lose significant portions of their savings. The U.S. market has fallen by more than 40%, while international markets are down by 60% or more in many cases.

In this scenario, one of the questions that I am most frequently asked is, “How do I make my money back?” My answer to this question is simple - don’t try to make your money back. If you try, chances are that you are going to take unnecessary risks and end up losing even more money. For this reason, the best advice may not be something that many investors want to hear. It is probably better to forget about the past and concentrate on the future. While the markets are getting hammered, stocks are selling at a discount. Although no one can predict when the market will hit bottom, buying at a 40% off discount is something that rarely happens.

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Asset Allocation

Creating your asset allocation, or the mix of stocks, bonds and cash in your portfolio, is the single most important task that an investor has to face. Many studies have shown that the proportion of stocks, bonds and cash held in a portfolio has a greater effect on its returns and volatility than the individual investments that are chosen.

That is why after assessing one’s investment goals, it’s of the utmost importance to create an allocation that can help you achieve the aforementioned goals. Once you have fixed your asset allocation, you can start considering what to buy. “Be greedy when others are fearful,” is one of investor extraordinaire Warren Buffet’s favorite sayings. Many economists believe that the United States is in the midst of a recession. While this does not sound good, there may be a silver lining for investors. Though you need to always remember that past performance is no guarantee of future returns, consider this: According to a report in Smart Money, “Stocks tend to rebound before the economy does. Over the past nine recessions, the S&P 500 has gained an average 13% during the second half of the downturns and another 13% the year after they ended. Even during the Great Depression, the S&P rose 33% from the market’s trough to the end of the recession. And while it’s folly to try to predict a bottom, with the market down 40% from its 2007 high, it may not be far away.”

Buy Low/Sell High

During more stable times, clients ask me which stocks I think may have big upside potential. Usually, they are looking for small companies that have the potential to move up rapidly. I like to refer to this as “being a hero.” These clients expect me to wade through loads of information to pick out a company that no one has ever heard of. (Whether that is realistic or not is for another column!) In today’s climate, however, there is no need to be a hero. It is not necessary to speculate on risky companies. It is enough to look at large companies that continue to pay or even raise their dividends as a place to start. These are usually companies that make products that we all use in our day-to-day lives. For example, come what may, consumers are still going to use shampoo, toothpaste, soap, and other necessities.  Obviously there is no guarantee that your money will be doubled within the next week. But if you have a long-term investment horizon and you can withstand continued volatility, then investing in stocks now will have the potential to reward you in the future and help you rebuild some of the wealth that you have lost.

With the current market volatility, it is worthwhile speaking with your financial adviser to make sure that your portfolio is well designed with your financial goals in mind. Then, if your financial plan allows for it, have a talk about trying to take advantage of a once-in-a-lifetime opportunity.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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As submitted by The New Rules of Investing:

What do you think of when I mention “investment newsletter”?

Many will answer referencing the numerous emails (spam?) they receive on a daily basis with information “that’s guaranteed to triple your money!” While that’s a preposterous boast, I think the most important thing to do when starting a financial newsletter business is picking the theme of the newsletter.

Picking a niche topic versus building a general investment newsletter

The key in the investment newsletter business is positioning (see this for an explanation about your Unique Selling Proposition), just like in many other consumer-focused businesses. Success in branding, marketing and distributing your newsletter will be built upon your investment newsletter’s theme. e-books, like newsletters, follow similar rules.

So, is it better to go niche with your newsletter (and publish the clean technology newsletter) or stay broad with a loosely-defined universe (like Joe’s Top Stock Picks)?

I think there is a fine balance between being to tightly-defined (Chuck’s Tech Stocks that Begin with the Letter ‘A’) and standing out from the rest of the pack.

See what else is out there

Go to Forbes Newsletter site.  Forbes runs a whole business where they distribute and market other people’s newsletters.  Check out some of the leading titles.  You’ve got

• personality newsletters — newsletters that are sold leveraging the reputation of an individual (e.g. Gary Shilling’s Insight, Gilder Telecosm Forum)
• sector-focused newsletters — investment newsletters focused on different industries (e.g. Forbes Wireless Stock Watch)
• product newsletters — newsletters focused on investing in specific products (Forbes ETF Investor)
• geography-limited newsletters — investment newsletters focused on opportunities in certain countries (Canada Report)

The majority of the investment newsletters tend to fall in the broad category.  This is probably because the audience served by a broad newsletter is larger than any of the other options.  If you choose to go this route, you fall into the space with the greatest noise.

Buck the trend

The reason so many newsletters have to resort to such slimy marketing tactics is because they lack differentiation because they are so broad.  If you want to stay above the fray, get better defined, without becoming so niche that you become irrelevant.

Have the foresight to scout future trends.  Analyze new investment products as they gain traction.  Scout new geographies where visibility is poor (China hasn’t been taken seriously enough).  Have the insight to pick an investment newsletter focused on the next hot sector in technology.  There will always be buyers (albeit, fewer) for more niche newsletters.

But here’s the thing: they’ll pay more for your expertise.  So instead of finding yourself in the $39-$149/year club, you’ll push the upper range.