1 January 2011

Investing in 2011

They always say the best time to really take a shot at becoming nice and wealthy is during a recession or during times of deep economic uncertainty. With that being said, we all know that  we are standing in the midst of such a time right now. Things such as house prices etc go down in value, people stop spending money because they are afraid of what will happen to their jobs, companies lay off employees because business no longer booms and a cycle is created. Television stations, radios and newspapers begin crying the blues about how terrible things are, and they are indeed terrible, yet this causes the masses to do the opposite of what they should be doing, which is fantastic
news for the educated! :-)

A knowledge which has been commonplace amongst investors for a long time is that immense wealth can be created whilst everybody is panicking, almost like slipping in through the back door unnoticed amidst mass commotion.

So how about 2011? Will there be a recovery in the economy. Will things go back to some level of normality? Many experts don't think so, and from an investor standpoint that suits us down to the ground.

There are four asset classes that I am vigorously trying to acquire and they are: businesses, paper assets, commodities and property. Now if experts are right and the economy remains suppressed, here is why i will have a good chance in all 4 areas.


In simple terms, during times of deep economic uncertainty many businesses get wiped out. The market subsequently opens up to those with novel ideas who can come and provide something of value. Hugely talented individuals are suddenly available on the job market which is great for a new business in terms of finding an excellent team to increase the chances of business success.


For as long as the economy remains in trouble and the government continues to print more money to pay its debts, the value of the money we hold will continue to decline. It stands to reason that when there is too much of something, not as many people care about it. Interest rates are being kept low in fear that raising them will have a negative effect on the economy. In these conditions, gold and silver thrive excellently. Other commodities such as oil, rice, cotton etc also do very well.


To be honest, regardless of what is happening in the economy, wisely investing in the stock market and using some of the vehicles need not lead to catastrophic loss. In a downturn however, knowledgeable stock pickers can spot bargains that may have lost value but hold much higher intrinsic values. There are many things which one can do at any time such as stop losses etc so that, recession or no recession, it matters very little.


Because house prices continue to drop in value, there are huge bargains available in the property world! Redundancies lead to repossessions etc, all of which open up the number of investment opportunities there are. In a down economy when there is much more opportunity etc, its great to jump in and acquire as many assets as possible, and when the economy turns up, your wealth goes through the roof!

In closing, there is plenty to be optimistic about in 2011 as opportunity appears set to remain open for us all to take our investment shots! Happy new year!


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