I’m going to step outside the marketing/PPC scope of this blog a little with this post, but still on the topic of making money. Everyone sees the daily news of the recession and economic collapse in almost every sector. Its easy to get depressed and fearful about your money like most people. But I see this as one of the biggest opportunities of our lifetime to make some bold moves that could pay off big time in the future.
As the best investor of our time Warren Buffet says “Be fearful when others are greedy. Be greedy when others are fearful.” I have always followed a contrarian view like this, and now more than ever is the time for it. Its definitely not easy to do, especially when you are as conservative as I am when it comes to investing. But with most stocks at 40-50% off their prices a year ago, and home prices reaching 8 year lows, I see this as the time to jump in and make some big moves.
I used to trade a lot of stocks, but got totally out of the market about 5 years ago. (“Be fearful when others are greedy”). In the last week though I have been rotating out of cash positions back into stocks. What am I buying? Not tech stocks. I am buying mostly boring stable, high quality DOW stocks that pay dividends. That way I minimize the risk of the company going under, capitalize on 5-7% dividends, and hopefully profit when/if they move back to normal valuations.
I also feel this is right time to put some aggressive offers on distressed homes. With the record number of short sales and forclosures, there are some smoking deals out there.
It’s definitely a gut check to put money into a market like this, but you have to take big risks to get big rewards. Time will tell if these are smart moves or a disaster. What do you think?
note: these are my opinions only, never make financial decisions based on a blogger’s advice 
You got balls man. I wouldn’t buy stocks now if you paid me!
We’re nowhere near the bottom but for a long play it certainly makes sense.
Yes. This is the time to buy. The Lehman CDS settlement Tuesday proved it. The chicken-littles called for a $400bil. bloodbath. What happened? $6bil. Settled “without incident.”
good post!
in my opinion it’s still too early to invest. the correction is going to last a couple of months and it will be the time to buy when PER (price earning ratio) is near 5-6! remember me
We’ll check this post in 6 months and see if you were right Eric!
For the most part, I agree with you Chad. I also have some of the same sentiments Eric does.
I am willing to be a little “late” on buying and lose a some potential profit, in order to avoid the uncertainty that the bottom has not yet been reached.
I think the problem with being a little late on the rebound is it will all happen very fast, and it’s gonna be pretty hard to catch it on the way up. Probably 30-40% of the rebounding gains will be in a few hours. I’ve bought some stocks in the past week or so. Overall I’m downso far, but I think I’ll keep buying as the prices keep dropping – at least for a little while.
I generally agree – for most though, real estate is a bit sketchy and requires a great deal of context to know if it is a good time to buy. Down here in Charleston, people went insane building houses – way ahead of demand so buying distressed mortgages on homes they can’t unload later would be a bad idea. Of course every area is different so my advice for most would be to stick with what either they know or someone they’re paying to know. In my case I love following the stock market but I don’t have expert knowledge so I’m better off buying stocks like Chad mentioned – and heck, even straight-up index funds.
Great point, all RE markets are local and unique. Here in PHX its one of the hardest hit areas in the country and seems like a good time to jump back in.
Definitely man. Still, I think it’s a good idea to DCA yourself into these positions in small lots spread out over a period of months. This is one of those very few times in a person’s life when everything is on sale. If someone were willing to do enough research, they could most definitely find those traditional Graham and Dodd style sub-working capital bargains that Buffett built his early fortune on. The biggest problem for most (which you don’t seem to have) is enough cash. Most people are stuck holding on to a bunch of losers they CAN’T sell now.
Luckily for me I have been 100% out of stocks for that last few years so I don’t have to DCA into positions. It’s all upside (hopefully) from here. Even though everything is essentially 50% off, I’m still trying to research purchases like I would in a normal market and buy quality.
[...] I took a calculated risk in the stock market. I had done a post using the recession to make some bold moves. When the market was basically collapsing and in sheer panic I bought Citigroup at 1.05. Talk was [...]
[...] I took a calculated risk in the stock market. I had done a post using the recession to make some bold moves. When the market was basically collapsing and in sheer panic I bought Citigroup at 1.05. Talk was [...]
[...] I took a calculated risk in the stock market. I had done a post using the recession to make some bold moves. When the market was basically collapsing and in sheer panic I bought Citigroup at 1.05. Talk was [...]
[...] I took a calculated risk in the stock market. I had done a post using the recession to make some bold moves. When the market was basically collapsing and in sheer panic I bought Citigroup at 1.05. Talk was [...]