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Friday, 04 January 2008 |
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By Charles Delvalle All signs point to a big slowdown this year. And if you don’t change the way you invest, you’ll lose a lot of money. There are two great ways to make money during a slowdown...
- Short weak companies. It’s easy to find them. Just look for companies that are doing worse than the competition. And if that company also is rated favorably amongst analysts, then you’ve got a great short candidate
- Stay out of small, speculative companies that rely on loans to keep afloat. When the economy slows and lending tightens, smaller companies will have a harder time getting financing. If that company isn’t turning a profit, that means they are only one year away from bankruptcy. But be aware, junior resource companies aren’t in this category. After all, there’s a bull market in resources.
If you can follow these two rules and combine them with sound investing principles (like stop losses), then you should do well this year.Source : Investor's Daily Edge
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