Hi All,
I got up this morning listening to the latest economic statistics on the radio. It got me thinking about the state of the economy and how you might profit from the current situation.
Several signs point this mildness of this recession. Wal Mart and Costco today reported increased sales of 3% relative to last month. The number of first timers applying for unemployment declined a bunch as well. Big internet companies like Google are still making money hand over fist and here in DC, it still possible to get a mortgage loan. There are also are plenty of construction and renovation projects going on in the District also.
However, not all is well on the national scene. Gas prices are still high, which is really hitting the airlines and the trucking industry hard. The banking and automotive sectors are having rough time as well. States like New Jersey and South Carolina are having their budgets squeezed because of higher fuel prices and lowered tax revenue.
So, can you profit from all this doom and gloom? Yes.
1) If you are a stock trader looking for extra bucks, you might consider avoiding troubled sectors of the economy such as banking. Instead trade in issues that are going up, like oil and natural gas exploration.
2) For those considering buying a house, do it now. Provided that you have a down payment and a steady income, you can find a good deal. In some markets, prices have declined to the point where buying may be cheaper than renting. Specifically in some parts of Florida housing values have fallen by over 50%, and a California developer recently offered a two for one on luxury housing – Both of these indicate that good deals on real estate can be had for those who shop around.
3) Now is the time to avoid being dependent on gasoline. Much of the price of gas is being driven by international demand from China and India – this isn’t going away anytime soon.
If you have a car you don’t really need, sell the darned thing. This might not work for everyone, but if you live close to your work and can find alternative transportation, sell your car. You’ll save on gas, insurance, repairs and taxes. Also you’ll be able to put the sale proceeds to good use by investing or paying down debt.
Best,
James
