Before answering this apparently simple question, we should quickly analyze the causes that led to the current credit crunch, whose consequences are becoming more evident and life-changing by the day.
It all started in 2007, when the mortgage subprime bubble burst, causing housing prices to drop and people to lose faith in the banking system.
As a result of this lack of faith, many stock market investors turned to more secure products, such as insurance policies and so forth, seeing as the stock market became very instable.
Now, when stock prices drop, investors usually ring their brokers and financial advisors straight away to make sure that they sell the stock they purchased on their behalf, mainly out of fear, and thus cause prices to fall even further.
Who benefits from situations like the one I just described? The cleverest investors, who, instead of selling their stock as soon as prices start falling, purchase stock when prices are already low. Once they do that, they simply sit back and wait for prices to go up and make lots of money.
I know that this is easier done than said, but if you find a financial advisor who has the experience and skills to get you in at the right moment and out when prices at their highest, you might wake up one day and find out that your savings have literally doubled.
In light of these observations, I’d like to clarify that if you are not familiar with the stock market or are not willing to lose some money in order to make some more, then I suggest that you opt for more secure financial products, such as funds, bonds or insurance policies, and stay away from the stock market, especially if you haven’t yet found a trust-worthy financial advisor.
If, on the other hand, you feel like taking advantage of the financial crisis and invest in the stock market, here is some information that you may find useful.
– Gold is expected to rally beyond $2000, silver $40 and oil $150
– The housing market will probably get even worse, as prices will keep falling, so don’t sell your home if you have one. On the other hand, it would be a good idea to purchase one.
– According to WealthDaily, 2012 is the year when the Euro will finally cease to exist, in light of the huge debt accumulated by some of the most important EU members, such as Greece, Spain, Italy and France.
– Natural gas will no longer be a good investment
– Rare earth prices will rise significantly once again
– Buy 2011’s worst performing stock, as over the past few years, those who opted for this strategy have made lots of money. Last year’s worst performers which made many investors rich (or richer than they already were) are Weyerhaeuser, Dean Foods, H&R Block, Comstock Resources, And Apollo Group.
Although not completely reliable, these predictions are quite likely to turn into reality to consult with your financial advisor and start planning your strategy for 2012.