Where to invest right now

The stock market just crashed, investors are dumping their investments like crazy, and the economy is in a recession. So, where is the best place to invest right now? This question may seem odd, but the fact is, investing during a decline, at least with a long term approach, can be very profitable. You basically get to buy stocks are a deal, and then if you hold on to them until the decline is over, you can cash in on the rise. History shows there is always an upturn after a severe downturn, and you do not get more severe than a crash. The problem is it could still be years before this rise happens. So, in the meantime, where do you invest so you do not lose money, and so that your investments have the most potential of being profitable and surviving the current market conditions?

The answer is never simple, however here are some general tips, followed by some specific companies and sectors that would be good investments right now:

Tip one: Do your research.

Too many people get excited about the prospect of buying stocks on sale, and instead of doing due diligence, they assume that the decline in stock prices is due to the stock market condition, not the company directly. This is simply not the case. For large companies like Google, etc. a decrease in stock prices may simply be due to the market crash, but for other companies it could be a sign of their inability to stay up with current trends, poor management, or financial trouble such as poor cash flow. So, make sure that when you invest right now that you do not attribute all problems to the current economy, but take time to review financials, past performance, and future potential.

Tip two: Diversify your portfolio.

This is a great tip for any time you invest, but the fact is that when the market crashes, and the economy is down, it becomes even more important. You want to diversify into various sectors of the market, but be sure you still understand what you are buying, and how your money is being used. You also may want to consider diversifying your investments to companies outside the US. This means that should one sector falter, you have investments in other sectors to help fortify your portfolio against loss.

Tip three: Hedge risky investments with safe ones.

When the economy is down, certain investments become better "deals", for example, stock prices and mutual fund prices may be at all time lows. However, other investments may cost more, like gold and I Bonds. However, these investments become an important part of your investment portfolio when times are tough because they help protect you from severe losses, and keep your earnings consistently in the positive. So, when investing right now, provide yourself some measures of safety by choosing safe investment types.

Okay, now that you have some basic rules to go by, let's look at some more specific investments to make right now.

One, invest in companies that create staples for living. These are going to flourish more in an economic crisis than other companies, and will rebound faster and better as well. For example, look at things like health care providers, food manufacturers, beauty product manufacturers, etc. A great place to start would be with a company like Procter and Gamble. They have a wide market, as they sell products in several countries (thus they are less affected by a decline in one market), they provide something that will always have a high demand, and their track record shows that even in a declining or stagnant market they show profits and higher revenue then other companies.

PepsiCo is another excellent company to look at given the current economy. They have three different stocks to consider, one for the snack food industry, one for the industry of cereals and pastas, and one for beverages. They show consistently good revenue, and are less affected by market changes then many of the other food, snack, and beverage companies out there. They have a long history, and are a stable company that has positive cash flow.

Johnson and Johnson is another good choice for a company to invest in during the given market conditions. They too have had a long history of positive revenue, and are better able to withstand market fluctuations then many other companies.

Second, right now is a good time to invest in energy companies. People are going to keep paying for electricity when times are hard, and with the decline in natural resources, the demand gets higher and higher. Also, right now, energy stocks are at an all time low, and chances are they will go back up. Why? Because despite research into alternative energy sources, right now, and for the next several years, we are still going to be reliant on petroleum, and natural gas. Oil will decline when it runs out, but it is still a good investment right now because we are running low, so investing in drilling companies, and people looking for new places to get oil could result in huge profits.

Occidental Petroleum is a great investment right now as they are researching new energies, and are working to counteract the potential problems energy companies will face when natural resources start to run out. While most energy companies are losing money right now, they are still turning a profit, and will likely continue to do so.

Another company that is continuing to report growth during this economic crisis is the top companies in the natural gas sector. These include companies like Range Resources, and XTO Energy. This is a great time to pick up their stocks as they are low, but the companies are still reporting profits. In addition to that, as oil runs out, other energy companies are picking up the profits. This means as the oil reserve shrinks, you can make more money with natural gas.

Next, it is a good idea to invest in gold and US Treasuries right now. These are not going to be obtained at a great discount or anything, in fact, you may pay more for them during the decline then you would when times are good, but they are going to safeguard your portfolio. They hold value far better than most stocks and other investments, which means that should the market crash yet again, you will still have investments that are successful. This is how you hedge your riskier investments, and keep your financial portfolio in better position.

The fourth type of stock to consider right now is stock in credit companies. With food prices on the rise, and jobs disappearing, too many people are finding they do not have the reserves of cash needed to buy things like food. So, they are using their credit cards. This means that credit companies are continuing to make money despite current economic conditions. Yes, some people do not pay their bills, but they have to stop using their card if they do not pay it, so companies like Visa, Inc. and MasterCard are going to be stocks you see rise despite the economic condition.

A fifth place to invest right now is in technology companies. While they are impacted by stock market crashes, they have consistently shown to be a good sector to invest in because of their ability to rebound. One such company that you could consider is Apple, or Google. However, you could also invest in smaller technology companies that show good potential, such as Axsys Technologies, Inc. Even with the stock market crash, this company reported growth, making them a good bet.

Of course, because the stock market fluctuates, and it is a somewhat risky time to invest, it is also wise to invest in something with a fixed interest rate, and that will adjust with inflation. A good example of this is an I Bond. You can lock in current rates, and then when new rates are issued, you could make money. Always look at the fixed rate when purchasing an I Bond since it will produce the long-term results for investors. In addition to that, your earnings are not taxed, so you can make even more off this investment, however, there are limits to the number you can buy.

If you are looking for a liquid investment right now, consider a short term CD or a high yield savings account. They will not give you as high of potential for return as other investments, but they do guarantee some return making them a better option than no investment at all.

When looking where you should invest right now, consider what you know, your risk tolerance, and how long you can put your money in the market before you need it, as this will all affect how you should invest.