Recession is on the way, but don’t join the stampede out of the market. There are still ways to beat the bear. Martin Denholm has a simple five-point investment plan to profit in this downturn. 1) Go short. 2) Buy put options. 3) Sell call options. 4) Use bearish mutual Funds. 5) Buy reverse ETFs on vulnerable sectors.
Lynn Carpenter says the lessons from history show that doing nothing or selling everything are the worst things an investor can do in times like these. The brave — and ultimately the winners — will be putting new money in the market right now…
“Booming markets foster illusions; bear markets pull back the curtain,” says Chris Mayer. Contrarian thinking gives a peak behind the curtain before everyone else. The key is to be unafraid to go against the crowd…
If we are lucky, this US recession might only last two years, says Adam Lass. The economic rot is spreading from banks to consumers to factories…and then back again in a vicious cycle. Investors can use this period to buy up healthy firms at rock-bottom prices.
Monday’s record stocks surge seems so long ago. Today, the stock markets are painted a familiar red again. J. Christoph Amberger says this crash will last weeks…and then the real depression will set in. That means commodity prices are heading down further in the short term. And mining stocks will be right behind them.
Currency traders need to prepare for a stronger US dollar in 2009, says Sean Hyman in The Sovereign Society. The buck has broken a six-year downtrend, and it’s fast becoming the currency of choice as the credit crisis spreads to all corners of the globe. That’s why its the best place to be for safety and profits in the coming 12 months…
The Nasdaq dropped 2% yesterday as widespread panic pulled down equities across the board. However, Paul Moore says tech stocks offer good long-term opportunities. He says the best way to hedge risk on individual company shares is with put options. Alternatively, tech-sector ETFs or a market index such as PowerShares QQQ Trust (NASDAQ:QQQQ) will diversify risk across the industry.
Yesterday, Ben Bernanke warned of a drawn-out slowdown for the economy. He also said the housing market “continues to be a primary source of weakness in the real economy.” Andrew Snyder says this “weakness” is really a strength.
Think about it this way: we could soon be facing a housing shortage.
Falling property prices and tighter credit markets are putting a stop on construction activity. Buildings — especially in the commercial and industrial sectors — take a long time to put up. So this industry will be the laggard when the economy recovers.
If you don’t own land, Andrew says real estate investment trusts (REITs) are a great way to play the bounce.
But you have to cherry pick.
The retail sector is a nightmare now, but health…
What if things weren’t as they seem?
Investors rely on predicting the outcome of events. Causation. If this happens, then that will.
But what if randomness and uncertainty were the real movers and shakers of future events? It’s a scary thought. But it’s one that could make you a wiser investor.
It’s all in the Ludic fallacy theory of controversial polymath Nassim Taleb.
“When chaos rules, invest in chaos” says The Sovereign Society’s investment director Eric Roseman.
Eric’s chaos portfolio is thriving in the current market volatility. And he says anyone can make huge gains in the coming stock-market rally by applying a simple-to-follow strategy.
Eric’s strategy is four-fold: 1) Hold plenty of cash in FDIC-guaranteed accounts; 2) Use it to buy up distressed assets at multi-year lows; 3) Sell into strength; 4) Invest at least 10% of your portfolio in gold.
