Financial meltdowns always bring out crackpot pundits. Some advocate converting everything into cash. Others suggest investment schemes that defy the logic of any sane person.
And all of them seem to have a silver bullet for investing in today’s rocky waters. Well, investing just like life should never be done in a panic. That is a certain recipe for disaster. So friends, for what it’s worth – here is some hard learned advice. I openly admit I do not claim any expertise in advising anyone related to financial issues, but I do claim a lifetime of results where I have virtually no debt and a tidy portfolio to boot.
Top five strategies for investing in today’s volatile market.
1) Invest in companies where you really really like the advertising. Sounds crazy I know but think about it with me. Marketing is one of the best diagnostic tools out there to determine how well run a company is. Great advertising can only be created where a management team knows what they are doing. So if you find a company where you love the advertising – they are a good candidate for investing.
2) Invest in companies where you understand what they do. Conversely, stay away from companies that are businesses you don’t get. I can assure you that if you don’t get it – neither will the investment community.
3) No matter what you feel – do not react in a panic. If you are heavily invested in a sector that is being heavily impacted – take a breather. Do your due diligence and then act with cool hard intellect.
4) Remember – financial markets go in cycles. Maintaining your perspective is important to avoiding reactive and silly moves. I had a friend who bought half a dozen flip properties during the real estate boom who now is struggling to stay afloat.
5) Finally – “extreme” anything only works in sports – not in investing. Diversity and measured action is the way to go. Do not stop investing now. On the contrary keep investing. But don’t go off and buy 10,000 shares of a distressed stock based on some tip. Maintain a regular investing strategy. Steady as she goes is the mantra of the day.
That’s it – no great secret – no mystery – just good old fashioned common sense. It seems to be at a premium in today’s volatile market. But here’s the best news – no on can restrict common investing sense.
<span style=”font-size: x-medium;”>Judy Shapiro