Sunday, May 9, 2010

Opportunities in a Double-Dip Economy

Well now that Greece went down in flames there is one thing any logical value investor would try to do. Find opportunities to exploit the down economy. I would keep an eye on the stock market especially small cap investments. Those who are not in a position to invest yet, should try to get there as soon as possible. From what I gather, the biggest reward will come out of small cap investments, followed by the real estate market.

The Obama stimulus plan will end soon, but that will definately drive prices down. I would say that the best thing to do is apply for a house after the stimulus runs out (because you will not get it if you didn't apply before April 30th). The next thing you could do for yourself is if your a conservative style investor, purchase blue chip stocks which pay steady dividends. Obviously, the "riskier" investors are going to come out of this smelling  like a rose, but as they say, "No risk; no reward". I am not saying put all your money on the line in order to profit from this (you should only invest 15-20% of your net worth). For those that have a lot of capital, I would look into small cap index funds and precious metal index funds. Small cap to sell at a peak and then p.m. when the market adjust itself and depreiciates.