When the market was acting as if Armageddon was just round the corner during the financial horror of 2008 and early 2009, the lone question on a lot of minds was, “Are the chances of an economic disaster better or worse than the likelihood of a rebound?” Rationally, since almost every investment was selling at knockdown prices, buying stocks in an era of such keen anxiety should have been painless, though it would have been emotionally difficult.
For a small but rising number of savvy investors, uncertain times almost always present some opportunities. World dominating companies like General Electric (GE) and Coca Cola (KO) are trading at fire sale prices. These are companies that lead the market and that pay consistent dividends year after year. Can you imagine Coca Cola going bust? No? Well that’s why it’s such a great stock, and when it’s selling at a discount, it’s time to buy and hold as much as you can.
For now, if you’re looking at where to invest, tech giants like Microsoft (MSFT) and Symantec (SYMC) are safe bets, because they have lots of cash and little debt. On the government side, municipal bonds make sense at the moment because taxes are likely to go up. A municipal bond fund is the best way to purchase municipal bonds, since this will help to spread your risk. You can also purchase municipal bonds through a traditional brokerage account.
Gold is under-owned, and at the moment very expensive, but it should form part of every portfolio since it’s a hedge against inflation. You can invest in gold and silver by purchasing mining stocks such as Barrick Gold (ABX) and Silver Wheaton (SLW). You can also invest in a bullion-based exchange traded fund, or purchase the metal itself.
Another place to look if you want to know where to invest is the developing world, where living standards are rising, and there is a greater than ever demand for electrical power. These increasingly affluent populations will also want to eat better and more diversified diets, buy nicer smart phones and drive better cars. Companies that can meet these new demands are great bets.
Savings accounts are also a form of investing, and any balanced portfolio should include a high-yield savings account that can be instantly liquidated if you find a better investment choice. Real estate is also one of the best deals at the moment: it’s cheap, hated and in an uptrend. Another deal to look into if you want to know where to invest is a business franchise. Business franchises have support systems that protect you from failure, and you don’t need to spend on advertising.
People looking for where to invest should be warned that the economy is still volatile and expanding in fits and starts. As the US dollar is driven lower by government budget and monetary policy, other governments have also been cheapening their currencies to juice exports and job growth. This could precipitate a trade war. So keep in mind when looking for where to invest that though there are some good places to park your money, you should still approach the game of investing with caution.