It’s Time To Learn From The Bear, Not Harness The Bull!
Investment | September 14, 2009 at 2:08 pmIf it weren’t for this recession being an investor you’d have thought about umpteen ways to carve your niche in the bull markets. But circumstances suggest that you learn things from this bear market and implement your knowledge wisely to make less risky and profitable investments. Here are certain enlightening tips that you could use to make your investments in the present conditions and prepare yourself better for a similar eventuality if it ever happens in future.
Don’t Follow Media Blindly
If you’ve kept yourself updated with the happenings on television, you might know about how Daily Show host John Stewart took to task Mad Money host Jim Cramer for wrongly advising people to go for Wall Street investments in preference to savings and retirement 401k.Watch the interview on Indecision Forever. Cramer had obviously done that for better ratings of his show. The best advice for you is to take information from more than one source and make your investment plans.
Market Conditions Constancy Is a Myth
“They [subprime borrowers] were speculating that homes would continue to go up in value and they would get rich from the appreciation as a result—all before the foreclosure happened.” This was what John T. Reed an MBA from Harvard and a writer wrote about people who invested in homes in his book the Financial Meltdown . I second his opinion in that a bust is bound to follow a boom. It is but natural for business to be transient. Don’t be over optimistic that when some investment opportunity seems to be in a high it’ll remain so forever. What rises is ought to fall. Business gravitational force must I say?
Keep Your Compulsory Investments Separate from Speculative Investments
Your household expenditure, insurance policies and investment for your child’s education are different from the investments that you’d make in stock markets or any business opportunities in an experimental mode. Don’t risk mixing up both investments because business being of a very capricious nature you might risk losing out the money that you’ve saved up for your essential expenditures.
Avoid Complete Automated Investments
Today you might be having a lot of investment options for index and mutual funds where you automate your investment process. The automated process takes care of the market that you are investing in. With this you might risk making bad investments. Instead it’s always better for you to analyze the market that you’d want to invest in and then make your investment decision.
Old Is Not Always Gold in Business
You might of the notion that old and conservative investments are unaffected by market fluctuations. You might be 
assured under the wrong notion that for old investments to fall, the entire market needs to crash and that is quite improbable. That’s where you’re going wrong. Haven’t you seen the entire market crash towards the end of last year? So before going for those old investments be sure that even they are vulnerable to market conditions.
Use the lessons that you’ve learnt to the best advantage and see to it that you take the wisest investment decisions.
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