ways to gain from the downturn

Ways to gain from the downturn

Several stocks have fallen considerably in the past few months, some by over 50% in 6 months. The sectors most damaged by the credit crisis have been severly damaged, with stocks plummeting.

Many sites are now advocating that investors should pile into gold and oil, comodities that have seen a terrific boom. What happens after a boom? You guessed it. Bust. Many commidities have boomed over the past few years, especially recently as the average joe investor (and institutions) pile into something that 'is a sure bet'.

I find that commodity prices are much more volotile that both stocks and shares, and cannot be valued as easy. Furthermore, why lock in losses? If you are stocks, specifically, if you are in good stocks- stay in stocks! Selling a good share because the prices have dropped is a bad reason.

Some businesses are cylcical, like property and it's normal for their earnings to go up and down, along with the econimical cycles. Don't panic. If you are lost in the investment forrest with no where to turn, having trouble sleeping and listening to all the 'advice' on the economy i suggest you buy index funds and forget about real investing. Emotions stay out of stocks, if you are emotional maybe you should bung the money in the bank and be done with the matter. For everyone else, when the market rebounds, and if you've stayed true (and maybe even bought low) you'll reap the rewards.