It’s a simple question.  Are you making money during this economic crisis?

If you’re not, then atleast you should be setting yourself up to make some major cash in the future based off your actions now.

Time to Use That Rainy Day Fund

Warren Buffett recently put up an option to buy billions of dollars worth of GE stock.  I know from personal experience that GE’s stock has been going no where but down.  If that’s the case, why is Warren Buffett interested?  Simple.  It is still a quality company, but until now, the stock’s price has been over inflated.  Now with the economy going south, and most to all stock prices going down with it,  now is the time, in Mr Buffett’s opinion, to cash in and buy a bargain.

I’ve said it before and I’ll say it again, you do NOT buy stocks because the price is going up.  That’s like waiting for the price of gas to start climbing before you go and fill the tanks of all your vehicles.  You want to buy when the price of stocks is going down, ie, on sale.  As long as the company itself is a quality company and will be so for as long as you can tell, the market will come back and you’ll see a nice return on your investment.

Just Say No to Dividend Reinvestment

This idea is a major turn around for me.  It has to do with the idea of dollar cost investing.  The thought is that as long as you buy your stock on a consistent basis, price up or down, you’ll end up ahead because of the law of averages.

Now, stay with me on this.  I say, have all of your dividends go into, say, a money market account.  Do nothing with this cash until you see your bargain, be it more investment into a company that you already have a relationship with, or a brand new stock that you’ve kept your eye on, just waiting for that price to fall down to a certain point.

Investment is a Game, but Which Type are You Playing?

People like to compare investing to baseball, keeping your eye on the ball, and hope to knock one out of the park.  I have to disagree.  Investing isn’t like baseball, it’s more like golf.  Golf requires that you take your time, use the right instrument (or tool in the case of investing, ie call, put, or stop options, etc) line everything up, and only when you have everything exactly the way you want it, take your shot.  Now, does that mean that you’ll make a hole in one, of course not!  But, if you know what you’re doing, have experience, use the right tool, you won’t hit the ball the opposite way you wanted it to go, unlike striking out in baseball.

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