Take Advantage Of Values In the Stock Market

Last night I had trouble sleeping, and for some reason, I started thinking about industries that are tanking and will be a value for investors in the future. So many of us are scared by the media when they throw out words like recession and depression. We automatically think we’re going to lose our jobs and all of our life savings. It’s simply not true. Yes, there are industries that are lagging, but the bulk of the economy is doing just fine. Circuit City filed for bankruptcy, but in my opinion, it has nothing to do with the economy. They were always the bastard child to Best Buy. They’re prices couldn’t compete, and their customer service was horrible. Sometimes, companies fail because they suck, not because the economy sucks. Getting back to my theme for this post, let’s take a look at the industries to keep an eye on and start buying at a value in the market.

  1. The Real Estate Industry. It’s down right now, and it’ll stay down for a little bit longer, until the foreclosure situation settles down. Start investing in REIT’s and mutual funds that focus on real estate. The prices are so cheap, and this market WILL come back up in the next five years.
  2. Renewable EnergyIn case you haven’t heard, Obama is now our president, and the democrats love talking about saving the environment. My guess is that they will pump a lot of money into efforts to continue to develop renewable energy sources. Look for mutuals and ETF’s that focus on companies dedicated to developing alternative energy sources.
  3. The Financial Sector. They are down and investors won’t touch it. Snag financial services mutuals and ETF’s heavy on this industry, because you can buy it at a fraction of the price right now. Once the housing market comes back and the government cleans up the home lendinig industry, this industry will flourish once again with baby boomers starting to retire.

When interviewed by the media about the current state of the economy, Dave Ramsey always responds by saying that he looks at the stock market right now as a “half off sale”. It’s this kind of approach to money and life that makes people successful. If you wake up every day worrying about what is to come, you’ll never get ahead. But if you look for opportunities to become wealthy, increase your income, and develop a new career, you’ll get ahead in life. Think about that this week, and start looking into the real estate, financial, and renewable energy sectors for value stocks.

  • ekrabs

    I fully agree, although the more I read, the more I am seeing people much smarter than me guess that the economy will slip for the next two quarters. And I have to believe that it’s a very strong possibility.

    This won’t matter for investors who invest beyond those time frames, but for those who also trade at much shorter intervals (like me), it’s something to seriously consider….

    From what I’ve read, Circuity City is an interesting case study of how not to cut costs. In essence, the now-departed ex-CEO of CC at the time decided to cut costs by letting go some of their best (but most expensive) employees in middle to upper management, including those in marketing and so forth.

    The result? A brain drain of those who knows the consumer electronic business, and where did they go for jobs? That’s right. Best Buy. It just goes to show that even in business, there is such a thing as being too cheap, and that it’s no substitute for buying quality.

  • author

    yeah, we should still be weary of the economy.

    about CC, you are right. they made horrible decisions, but the media doesn’t tell the average citizen about that. they just tell you they went bankrupt and you are forced to believe that it is just due to the economy. no, it was due to bad executive management.

  • http://www.forestcotton.blogspot.com/ FINANCIAL DIRECTORY

    I really like companies in the solar energy business. These stocks believe it or not are down close to 95% from their highs the last five years hows that for a bottom in an index. Theirs an exchange traded fund it does not use leverage by the way that specializes in solar and solar related stocks. It current trades around 15 dollars this ETF trades under the symbol {TAN}