How should I invest in the stock market in the recession?
Thanks to Dave Kansas for his article in the Wall Street Journal on August 5, 2011, page C1 entitled “Time to Panic? Just the opposite”
Even as stock prices continue to plunge this week it seems that S&P 500 companies are still running strong. That is, having record years. While new investment strategies are probably prudent for average investors it should be noted that there are still plenty of good places to invest other than a savings account. Here are 3 strategies Dave Kansas recommends:
1. Valuation-focused investing: Look at the companies with strong earnings and declining stock prices. These will probably be good investments now.
2. Focus on dividends: Essentially, you buy stock that pays you while you wait for the market to recover.
3. Safety investing: Even though gold has recently been on the decline it is believed that it will make up for lost ground in the near future.