Remember, NEVER invest in stocks with borrowed money unless you are 200% sure of success. Right now the stocks look cheap. There are some who are urging people to buy stocks before they go up again. Well it all depends. First, the bottom has not been reached yet. But if you have cash and would like to invest, then you have to pick stocks that have a future; that is to say the companies that you are investing in are going to make money. Investing in a car company that keeps making gas guzzling cars is a mistake. On the other hand investing in utility companies, especially those that generate electricity is a good one. We have to look at the world and see what will be in short supply and which companies will solve our problems; then invest in those companies.
I have already explained that our population is growing rapidly while our food supplies along with oil and water are diminishing. From this you can see that investment in sources of food, energy, water and related industries is a good investment. Stocks in the Russian energy giant Gazprom (http://www.gazprom.com ) is worth every penny, since it has direct access to vast Russian reserves, is investing in pipelines to Europe and is getting into the Iranian oil sector as well. On the other hand Shell Oil Company is not as hot as Gazprom, since it simply doesn’t have the same access to the energy reserves.
But energy is critical to our survival. Our societies need some sort of energy to function. If it is not oil, then gas; if it is not gas the nuclear, if it is not nuclear then solar or wind generated electricity. The fact is that all these are good investment opportunities; all that is except bio-fuel. Turning corn into fuel is just madness, especially when we are facing food shortage. In addition, irrespective of what kind of agricultural product they intend to use, any available agricultural land should be used for growing much needed food and not fuel.
So if you are an investor and are interested in energy then you should focus your attention on nuclear power and possible alternative energy companies. But how do we know which alternative energy will become the norm. Well one thing is clear; whatever that can produce electricity cheaper than fossil fuel will be a success, be it wind power, hydro-electric, hydrogen cells, or what not.I have tried to minimise my own risk by going after companies that produce products that are needed in many different sectors. I chose a Swedish company called Morphic (http://www.morphic.se/en/) that produces Fuel Cell Components, Wind Power, Energy Technology, Ship Propulsion, Contract Production and Automation Technology. You can search in your country for similar companies, companies that are highly innovative, lean and are in the process of rapid expansion in a rapidly growing market. The future belongs to these companies.
Food producing companies are also prime candidate for investments. Nestle (www.nestle.com) for example is a very good and safe investment in the packaged food industry. Water distillation companies or those companies that have access to fresh water or technologies for purifying water are also good. Medicine manufacturers’ stocks have always been called defensive stocks, since they are less likely to be affected by the recession than others. They also present a good investment.
Besides looking at the stocks, you should be aware two things: in deflationary period cash is king and in inflationary period asset is king. If you see that inflation is rising, invest your money in real-state and stocks. If deflation has taken hold then save your money, it is worth more tomorrow. In periods of stagflation invest in some other country where inflation is lowest.
In these turbulent times people tend to rush to gold; if you haven’t, don’t. There is a bubble forming around gold that if people are not careful will burst. If you see that your currency is under pressure along with inflation, invest your money abroad. Don’t just rush and buy gold.
In conclusion I should mention that it is rather difficult (at least for me) to explain the economic situation and answer all questions in a few pages. I have received a lot of e-mails from concerned readers about what they should do and where should they invest and even which degrees they should take. I have tried to answer all these questions in a few pages. I hope that this article has answered at least some of those questions. In addition I have directly answered some e-mails and if time permits, I shall answer the rest. Meanwhile, I hope this article provides those concerned with some answers. Thank you.
Dr. Abbas Bakhtiar be contacted by e-mail at:bakhtiarspace-articles@yahoo.no
Copyright Abbas Bakhtiar, all rights reserved.
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