Recession Survival

How To Profit From An Economic Recession!

Stock Market Investments

Page 2

(e)  What about gold? Gold isn’t going anywhere. If you’re looking for a safe, solid and low risk investment during a recession period, gold is an excellent choice. There is very little chance that the value of gold is going to depreciate rapidly, and it’s definitely not going anywhere.

(f)  Successful investing isn’t always just a matter of knowing what to invest in. Many times, it’s also a matter of knowing what not to invest in. There are certain industries that often bring about good returns when the stock market is high, but who are extremely risky during times of recession. Can you guess which industries those are? Right. Any industry that specializes in luxury services is going to take a hit when conscientious investors start counting their pennies, and as a result so are their stockholders. Good industries to avoid include airlines, luxury resorts, restaurants (unless they have been around for a while) and, of course, financial and lending institutions (who are likely to go under as their borrowers slip further and further into debt).

(g)  If you aren’t familiar with the process of investing the best thing you could do for yourself to ensure the continued growth and success of your investments is find a skilled financial counselor and/or investment broker to work with. Ideally, they’ll be able to look at a company’s past history and their current place on the market and let you know whether or not they are a good choice for investment. Choose your broker with care, however; the last thing you want is to see your hard work and cautious planning fall apart because your broker was overly ambitious and pushed you into an investment that was doomed to failure from the very beginning.

2  Diversify. Regardless of how established a company is, there’s no way to positively predict how they are going to react in the event of a recession. Your mother always told you not to put all of your eggs in a single basket, and she was absolutely right. If you can spread your investments around a bit through several companies in a variety of industries you will stand a better chance of being able to profit from this recession. Even if the bottom falls out of one and it goes under as a result of the poor economy you will have the others to fall back on and ensure that you are never left holding absolutely nothing at the end of the day.

Like real estate, investing in stocks now opens the door to the possibility of tremendous profits down the road. You may not be able to enjoy the same $100,000 gain you would have had you chosen to invest in houses rather than stocks, but you will enjoy a comfortable profit that will help carry you through on into the new economy.

Picture this. Let’s say that you decided to take advantage of Fannie Mae’s current position and bout 4,000 shares of stock. (For the record, this is not something I recommend; Fannie Mae is simply a hypothetical example for the purpose of this book). At a dollar each, you’d be able to acquire the stocks for under $4,000.

Not a bad day’s work, all in all. You set the stocks aside and forget about them as the recession draws to a close. Somehow Fannie Mae has managed to weather the recession, and because of it your stocks rise in value back to their original price of $16 apiece. That means that the stocks you purchased during the recession, the ones that you paid less then a dollar for, are now worth sixteen times their original value. That means that instead of the $4,000 worth of stock you thought you had, you’re now sitting on $64,000 worth of stock.

That’s a $60,000 gain. $60,000, a year’s worth of salary for part of America’s citizens (two years’ worth for many) to get you started in your new life, all because you had the good sense to invest in the stock market when the selling price was low and the stocks were being agreeable. You saw the opportunity and you took it, and now you’re going to reap the rewards.

Page 1  Table of Contents