Investing When Times Are Bad

Many people are more than a bit spooked when it comes to investing these days and rightly so. It has been a scary few years. In the face of tough times, however, we can find lots of opportunities. It is rather ironic, but this is perhaps the best time to be investing because there are some deals out there.

Let’s consider real estate first. The housing bubble burst like an atomic bomb. The fallout has been extreme and the ramifications still aren’t over. The real estate market has stabilized, but few would describe it as bouncing back strongly. Given this, now is a good time to avoid buying a home, right? Actually, the opposite is true.

Homes have never been cheaper. If you can afford to buy one, now is the time to do it. Ask yourself this – what do you think the housing market will look like in 10 years? It is going to bounce back. It might take the market three to five years, but it will happen. When it does, the value of your property is going to grow like made and you will generate a nice nest egg of equity. It’s a no brainer.

What about the stock market? Well, the weakling companies have been weeded out for the most part. The opportunity to buy strong companies at cheap prices have never been better. Consider the oil spill down in the Gulf. BP and Transocean are facing uncertainty over liability issues. BP in particular could end up in bankruptcy court in an effort to limit what it pays out.

That being said, other drillers like Diamond Offshore that had nothing to do with the spill are seeing there stock prices slammed as well despite being strong companies. Yes, there may be a drilling moratorium for six to twelve months, but do you really think it will go beyond that? Getting off oil is a noble goal, but renewable energy is nowhere near being ready to handle the load. If anything, demand is growing as record numbers of Chinese start buying cars. Buying and holding drilling stocks for the long term could be a very rewarding strategy.

It has been a rough couple of years and the pain isn’t over yet. That being said, there is always a silver lining to such times. If you have money to invest, you will never get another chance like this one.

By: Barry Milton

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Barry Milton writes about financial planning for UFCAmerica.com.