Short and Long Term Investments
One of the major problems with the today’s stock market and the fact that anyone with a bank account can invest freely in anything they want is that short term investments rarely work.
Few people understand the stock market well enough to know (or accurately guess) what will happen over the course of a few months.
To truly profit from your investments during a crisis, you need to think now about how a company will perform over the course of many years.
So, think about companies that, while they might suffer in the short term, will thrive in the long term. Here are a few examples of what will likely do well as the economy runs its course:
If a company has a stranglehold on a market either due to advanced technology or a strong brand, they will survive whatever happens.
Keep in mind, however, that while some brands are strong in their market, they can still suffer in a changing economy, especially in fields like entertainment. Look for need-based companies.
The better the return on equity a company provides, the better they are investing their revenues and the more substantial their growth.
Outside the US
The US dollar and a blistering trade deficit are major problems for companies operating in the US. So, look for companies (US based or otherwise) with a large portfolio of international customers.
While US companies will suffer, the fall in the US dollar will help companies in the US that export high demand commodities to other countries.
Start now. The sooner you invest and the more carefully you analyze your options before the crisis, the better your portfolio will perform.
Don’t expect to stumble on a penny stock that will explode in value after the crisis. Look for stable, long term investments that will perform well despite the crisis – this alone will put you in rarified company when the economy runs its course.