This latest fall in the stock markets all over the world is said to be a chance to buy good stocks that would eventually become big gainers in the future. I just wonder what you guys think are the good stocks to buy in this time of price downfall in stock and shares? Do you think it's a nice idea to invest in oil right now? What do you think are the other areas of the investment world which will be able to project back up once this crisis subsides?
If you want to keep your portfolio afloat during a recession period, think long term, not just into the future but into the past. Look at companies that have been able to weather similar storms previously, companies that have been around for decades and have always performed well. Think about consumer products companies - those goods that people still buy during tough times: Food, alcohol, clothing (not too high-end, just the general retailers). Avoid things like consumer electronics and luxury goods during this time as people are more likely to cut back on extravagances. I think oil used to be a safe bet, but now not so much. Think instead about commodities. People are still building stuff all over the world and recession often prompt governments to focus in on bolstering their infrastructure to promote growth, so building materials, metals, etc.. will be sound investments. Also, if you think the worst of the recession is over, currencies might be a good investment, but you have to pick your timing on this one, or you could lose a lot before you start gaining.
On the contrary, I think the falling prices in the stock market is due to the influence of oil shares which is greatly suffering presently. Although the oil price in the world market is trying to make a rebound of sorts, I don't think it can go back to the previous level where OPEC had a heyday. For me, a good investment is in stocks of companies dealing with alternative energy. Like the wind turbine and solar power panels, the prices are not soaring but I'm sure their popularity for clean energy will make those stocks soar to the top of the board.
I think that the oil industry is now slowly coming off from its downfall. Where I live, oil prices are announced to go up within this week so the transport sector is now trying to contradict the proposed decrease of fare prices in public vehicles. For the past months, we have experienced lower prices of petrol that allowed car owners and public vehicle operators to save up on gas for sometime. Now that oil is again expected to recover from its low price, I think the ones who took the risk of investing in the oil and energy industry will soon reap their rewards.
I disagree, if you are thinking of US alternative energy companies as good investments; I don't know about the Chinese companies. A number of solar energy firms have gone belly up, including some with federal grants, in recent years. Look at other investing discussion forums discussing stock dividends as a source of income for those investors approaching retirement or already there, and you'll find Verizon (VZ) and AT&T (T) consistently mentioned as good dividend payers over the years. Perhaps not terribly exciting, but these two are standouts with yields of ~5%. On some forums Ford (F) is getting heavy play right now, from those seeking dividend income, as the current share price puts the dividend well over 7%; the problem with Ford is its share price is abnormally low (opinions vary as to why, but it is of no consequence for those collecting dividend income) and those in around $15-16 are complaining that the share price is stuck in the mud. As always, your mileage may vary.
I am long TSL and I'm loving it. I wouldn't really touch the US companies either, most of them seem to be trading at HUGE P/E anyway compared to the Chinese counterparts. And with costs being what they are in China, and the solar business being very competitive, I don't see a bright future for most US companies unless they can get a technological edge.
There are several ways to determine good stocks to buy. The basic thing to know is that these are not get rich quick schemes. You have to be patient and analytical. One way is to use the traditional time tested tools like fundamentals to alof technical analysis to analyse stock market trends. Another innovative method is to look for companies in virgin areas of medicine, science and technology that show promise for future growth. Microsoft was in this stage in the late 1990s and see where they are now. Those who bought Microsoft shares then reaped a fat dividend. As for oil, you can never go wrong since cartels ensure that prices go north.
I have always tended to avoid anything with oil, it is just not an area that I know much about and I am very in tune with geopolitical events, which really seem to affect the price of oil more than any other commodity. I think that is a good general piece of advice that some people should follow...invest in areas that you know a lot about or have a genuine interest in.
I agree with baudwalk about the alt energy companies. I have long had a few bucks here and there in some companies across various alt energy industries - solar, fuel cell, etc. They are extremely volatile and quite risky overall. One should do their homework on these and buy them lightly, if at all. Timing can often be crucial with these. The best thing to do is to buy a number of companies across a number of sectors and industries. You can do this by either buying a broad market index fund, or several better managed mutual funds, or by digging in and finding a number of companies on your own - like probably at least 10-20 different stocks or more across a number of different sectors and industries: energy, tech, biotech, industrials, materials, consumer staples, financials, etc. If you're more conservative, you'll want to stick mostly to larger, more stable companies in more stable and less volatile industries that likely pay a nice dividend.
I think personally if I was going to invest in new stocks it would be something like medical disposables, as our population in the United States is aging. Most of us in the baby boom generation are nearing retirement or are already there, and older people need more medical care. I think this is a sector that will probably take off in the near future, if it hasn't already.
