A Cautious Return To Investing
We're all wondering if the market has bottomed out and it's quite likely that we won't know for sure until long after the fact. Nonetheless, there are signs that the bleeding has slowed. For individuals with a modest amount of money on hand and a tolerance for a little short-term turbulence, now is a good time to begin testing the investment waters.
There are a few strategies you can use to be well positioned as the rebound begins in earnest. First, be in the market, but be in as much of the market as possible. Look for index funds that mirror a wide assortment of industries. Your play is for broad-based improvement, so your investment should reflect that. Second, take a close look at commodities, again on a very broad scale. In general, commodities have taken the same or greater degree of beating as the market as a whole, but because they tend to have a relatively static range of supply and demand, there is an opportunity to take advantage of their gradual gain in value. As the economy improves, so will demand for these staples. Once again, the key is the “rising tide” strategy. Limit your exposure through a broad-based strategy. Look for commodities funds that avoid concentration in individual commodities or industries . Finally, consider the bond market. As the economy begins a gradual pivot, the more conservative investment options such as municipal and corporate bonds will lead the comeback.