Ups and Downs lets make money

What a wonderful time to be making money. When the economy is bad there are more opportunities then ever. This was true during the high interest rates that killed the Real Estate market in the early 80's It was true the during the savings and loan crises of the late 80's early 90's and it is true of the liquidity crises of today.

Stocks are dirt cheap, I think the bottom was last week, and we will gyrate a lot but the over all trend is up, Why! because it is in everyone interest and they want it to be that way. You have to remember that every payday lots more money is being put into 401k's and it need a place to go, the stock market is the place of choice.

Gas is down, the price of oil, and other commodities where to high, and unrealistically to high. The causes of the high prices where not sustainable and common sence tells you that they would collapse under there own weight, and they did just like the home prices are doing now. It is the law of supply and demand at work. I look for oil to settle in at around $70 a barrel. Again, everyone in that business wants and needs that price range, so look for it to happen. Above a price of $100 a barrel demand shrinks, and alternatives get revved up, below $60 a barrel, production starts to wane as investments in drilling and refining tighten up.

Home prices are near bottom, the deals are starting to thin out ever so slightly as the home builders unsold inventory gets sold off, that will take pressure off the existing home sales. Then in about eighteen months builders will start building again and prices will start back up, just at a slower pace then in recent years. You can calculate how long this will take in your market by taking the existing inventory of new and pre-owned unsold homes, and add any new housing starts, then get the sales rate for your area and divide the average absorption (sales rate) rate into the available inventory and you get number of months to equilibrium. Credit is the key here and the government is pushing the easing of credit hard.

Opportunities are out there to be had. Some of these are; buy foreclosures and builders closeout homes, Many businesses will go out of business early in the new year, the assets will get auctioned off during all next year, buy some assets to use or resale them. More commercial buildings will be empty as stores and businesses close, can you think of a profitable use for one of them. Some people will want or need to sell their business, go find a business bargain, the business brokers are looking for buyers and you can drive a good bargain in a down economy, because there are fewer buyers. It is a great time to get into mutual funds at a low cost per share. REITS are trading down and the ones who have a strong balance sheet and cash on hand will increase in value quickly as real estate markets turn positive again. Think of things that you can do, or investments that you can make, that would allow you to make a profit from this economy. Buy stocks in companies that have strong balance sheets and who have historically paid a dividend, hard to go wrong on them.

Most importantly do something. You can not expect different results if you are doing the same old things.