Stocks: What to Watch for in the Recession
Don't be surprised to see a new wave of consolidation as stronger players snap up weaker ones
Eventually, the crisis will end. That has investors contemplating what a post-crisis stock market might look like.
Predictions of a serious economic downturn are everywhere, and not just for the U.S. but for the entire globe. If the credit crunch lasts long enough, it could be the first truly deep economic pullback in a generation or longer.
Asked about the future, many professional investors and fund managers say they're far too preoccupied with the current crisis to make any long-term bets. That's why many refuse to buy stocks—the unprecedented global credit crunch has made solid predictions all but impossible.
"I'm going to wait until the dust settles," says William Rutherford, president of Rutherford Investment Management.
Glimpsing the Future
Still, investors will eventually have to picture what the new economic order will look like.
Arguably, a credit crunch or recession makes all of us losers. But even in a severe recession, some businesses survive and prosper—even if only on a relative basis, and even if they take years to muddle through.
"There's always going to be a winner out there," says Ryan Crane, chief investment officer at Stephens Investment Management Group.
Here are five trends that may emerge whenever the crisis finally ends:
1. The strong eat the weak.
In the financial sector, failing banks and brokerage houses have already been gobbled up by safer (if not exactly strong) rivals. Bank of America (BAC) bought up mortgage giant Countrywide Financial and Merrill Lynch (MER). JPMorgan Chase (JPM) absorbed Bear Stearns and Washington Mutual. Citigroup (C) and Wells Fargo (WFC) battled over buying Wachovia (WB).
If the economic downturn is bad enough, expect the same trend to hit other industries, as strong players either buy or take market share from companies in financial trouble.
2. Fast-growing companies might not get the funding they need.
The credit crunch is cutting off the financing that helps businesses grow and create new jobs, says Michele Gambera, chief economist at Ibbotson Associates, a unit of Morningstar (MORN). Companies can't float issues on the stock market or sell bonds—investors won't buy them. And they can't borrow from banks, which are too panicked to lend.
If those conditions persist, it means trouble for new growth companies. "Who is going to make the next Google (GOOG) if there is no money to borrow to build the next Google campus?" Gambera asks.
3. Cash is king.
In a credit-starved economy, the advantage goes to companies with strong cash flow. Gambera cites cigarette maker Altria Group (MO) as a company famous for its strong cash generation.
A healthy balance sheet—without much debt—will also be crucial. "Given the fact that credit markets have totally deteriorated, it's a question of survival," says Gary Wolfer, chief economist at Univest Wealth Management (UVSP).
He believes survivors could include consumer staples and health-care companies that sell products their customers need and that generate lots of cash in the process. He cites Procter & Gamble (PG) and Johnson & Johnson (JNJ).
4. Don't bet on the U.S. consumer.
Wolfer predicts "an awful Christmas" for retailers. But for consumer-oriented companies, the problems aren't just short term.
For a generation, the U.S. has created a "quadruple deficit," Gambera says: a government deficit and a trade deficit, along with heavy borrowing by the financial sector and, finally, by U.S. households. Few expect Americans' reliance on credit cards and cheap home mortgages to continue.
In fact, many commentators see a fundamental shift in the U.S. economy, away from a reliance on both debt and the overstretched American consumer. "The era of the consumer-based U.S. economy is coming to an end," Wolfer says. "Our whole economy is going to be much more export-driven."
5. Don't bet on the global infrastructure boom, either.
Wolfer and others may be pinning their long-term hopes for the U.S. on exports. But there are lots of worries about one force driving global demand for U.S. goods: the building boom in many emerging economies around the world.
In a global slowdown, many are betting that demand for capital equipment, commodities, and energy are going to fall off.
Emerging economies, such as China and India, may not slip into recession, but their rapid growth will probably slow, says Chad Deakins, portfolio manager of the RidgeWorth International Equity Fund. "There are going to be different problems each country is going to have to address, [problems that will] distract them from plans to build infrastructure," he says.
Five years from now, however, Deakins expect emerging countries to start building again. "There are a lot of people in the world who want a higher standard of living and are willing to work for it," he says. "That's capitalism."
Internet Money - Do Not Miss Your Share And Get Into It Now
As the use of the internet increases, there are more and more ways being promoted to get internet money. Choose from some of these options to find the one that fits you best.
Blogging
A business blog is a relatively recent way of generating internet money. If you have a business web site, you can use a business blog to attract traffic to the web site easily and quickly. Thus, your business site will have improved page rankings from the major search engines such as Google, Yahoo and MSN. When the page rankings improve, the search query results page returns the link to the page in a higher position than previously. Thus, it may appear on the first page of results rather than so far down the list that the searcher will take the time to scroll through other links and find your link.
EBay
Many people make use of online auctions such as EBay in order to earn internet money easily and quickly. You can sell products such as grandma’s antique kerosene lantern, but you can also sell information that will be of value to others. There are many related money avenues when you choose online auctions. You can open an EBay store to help others prepare, sell and ship their auction items. You can serve as a specialist in marketing and selling certain types of items for others. As an example, you may specialize in the sale of vehicles online.
Affiliate Marketing
Affiliate marketing is another method of gaining internet money easily. You form a partnership or affiliation with another person or business and help to market their product. For your efforts, you get a percentage of the revenue earned, or possibly a flat fee for each customer you sent toward the parent site. With affiliate marketing, you don’t have to set up the infrastructure of the business yourself. Often you just need to add a few lines of coding to your own web site. Other marketers use a ‘canned’ web page to promote the affiliate’s product.
Virtual Assistant
A virtual assistant is another way to take advantage of the opportunities to get internet money for yourself. A virtual assistant performs tasks of the same type as an employee with the same role. The difference is that the virtual assistant performs such tasks online. The duties involved may range from manning a customer service line to monitoring a forum or searching out good links for the boss. Payment may be through electronic means directly, or by a percentage of sales revenue or by other mutually agreeable formulas. Think executive assistant or secretary and you may gain a picture of the responsibilities of a virtual assistant.
Online Store
An online store can be another way to get internet money flowing into your bank account. If you already have a product to sell, you are ahead of the process, but even without a product, you can open an internet store and sell products that are produced by other people. If you wish, you can even arrange to have the product drop shipped to your customers so that you don’t have to deal with packaging and shipping tasks. The products that you sell can be tangible goods or information.
Make Money Online - How to Get JV Partners
Before I begin I first want to provide you a quick definition of JV. JV means joint venture partner. So if you have been hearing that word being thrown around like a hot potato you can consider yourself informed!
When you have a product to sell online, there are many different tactics you can use to help get customers. One great way is through Joint Venturing. A Joint Venture (or again, simply a JV) is when you partner with a person to help sell your product(s). While it is a great idea, it can sometimes be hard to find JVs. So here are some great ideas on how to find them.
The way you go about trying to find JVs actually depends on how competitive your niche is. If you’re in a niche that’s saturated (such as the Internet Marketing niche) then you will have to go about things a little differently. However, if you are in another niche that’s much less competitive then finding JVs shouldn’t be too difficult.
For the less competitive niches, all you really have to do is ask people if they’d like to JV with you. However, you have to ask the right way. The correct approach to asking a JV can be the difference between a 10,000 dollar launch or a 10.00 launch.
So you can do a Google search on your niche. Then write down the sites that come-up. Next try to find out a name for each site so that you can address each email personally. Then email the person who runs the site.
Introduce yourself and then tell them something you like about their site. Explain why you found it interesting and that you are interested in learning more. Here is the MOST critical point in seeking a JV. Ask them if there is something you can do to help the person out. Whether it is with graphics, writing, whatever you can do provide it shows good faith. Finally, if you have done the other things properly you will be able to tell them a little bit about your product and ask them if they’d like to hear more about a Joint Venture with you.
That’s how to get JVs in niches that are not too competitive. However, you need to take a slightly different approach on highly competitive niches.
In highly competitive niches you need to make yourself stand out from everyone else. There are hundreds of people who are looking for JVs in some of the most popular niches. So to stand out you want to approach potential JV partners and ask if you can do something for them. Whatever you might be good at, offer to help them with something that you are good at (creating a script, writing a blog, etc.).
Then once you do something for them, they’ll feel like they should so something in return. This is called the theory of reciprocity. What they may decide is something in return just might be a JV with you. Or, you might just develop a long-term relationship with a few people that will pay dividends for you far into the future (beyond just one Joint Venture).
Gathering JV’s can be a difficult process. It really depends on whether the niche is popular or not. For non-competitive niches all you really have to do is ask for people but for competitive niches you have to make sure you stand out to people who you want to JV with you. These partnerships are a critical component of being successful with your online business.
Make Extra Money At Home
There are many ways to make extra money at home. Some people who have a very imaginative mind and a good vocabulary write books, some stitch clothes, the ones who are creative and have an artistic bend make use of this talent to either paint or make creative items and then they sell them. But not everyone is a talented artist or writer. The computer and the internet provide people with plenty of ways to make extra money at home. All a person needs is a computer and an internet connection. He/she need not be an expert in computers. Basic knowledge of how to operate the computer and how to use the internet is more than enough. A little creativity and entrepreneurial skills would also help.
The positive thing about working at home to make some extra money is that you have flexibility of time, the freedom to work according to your convenience. There are many options available on the internet for making extra money at home. People have to weigh the different options and choose the ones which would suit them. The option they choose must be fruitful and help them make extra money at home.
One of the ways to make extra money at home is to do survey of products and write your opinion and views regarding that particular brand because a company spends so much money on research and advertisement so that they can reach out to the consumers and more over there is so much of competition in these fields among the various companies and each one tries to out beat the other ,hence it is very essential for the companies to know the tastes, preferences and requirements of the consumers so that they can cater to their demands in a more satisfactory manner. This is the main reason why companies pay people to survey the market and find out how consumers are reacting to their products.
Another way to make money is in case you are a creative person or say you are a seamstress and you design clothes or make quilts or related items then you can either use auction websites or start an online store which will enable you to sell your merchandise to anyone within your country or any where in the world. You can even start your own website and provide various services like resume writing, data entry and blog writing.
There are many more ways to make extra money at home. You can use the search engines to search for websites which provide work from home opportunities. Some companies pay good money to answer their e-mails. You can try that out if you feel up to it.
The internet provides a plethora of opportunities to make extra money at home. You can start your own internet marketing company with a minimal investment. You can also be a virtual landlord and charge others for using your website for selling their products. You can sell virtual real estate. You can also provide services like legal advice, medical advice and technical advice.
Are you looking to make extra money at home? Try Google Snatch. It could help you learn all the tricks and tips of the trade.
Article Source: http://www.ArticleBiz.com
Choosing the Right Green ETFs
by David Jackson
It's as compelling an investment theme as you'll ever come across. With global energy demand rising sharply, oil prices at all time highs, climate change concerns growing, and new technologies enabling more efficient power extraction from natural resources, the case has never been better for investing in alternative energy companies that will help us overcome our oil and carbon-emission addictions.
But try to pick a winner from the dozens of "green energy" stocks that have emerged in the past few years and you quickly find yourself slipping from confident investor to shaky speculator. Who's to say which of the upstart, publicly traded solar energy companies, for example, will produce the efficiency breakthroughs that field has anticipated for over 20 years?
ETFs to the Rescue
For investors who are sold on the alternative energy theme but hesitant to stock-pick, the recent profusion of exchange traded funds (ETFs) couldn't have come at a better time. These low-fee funds offer diversification by holding a basket of stocks that follow a particular index, and may have tax advantages over traditional mutual funds.
There are currently six alternative energy ETFs to consider. Note the significant differences -- in investment focus, international exposure, market cap, and expenses -- in each fund's holdings:
1. PowerShares WilderHill Clean Energy Portfolio (PBW)
Listed in March 2005, PBW was the first alternative energy ETF and tracks the WilderHill Clean Energy Index. The fund holds 40 U.S.-listed companies that produce green or renewable energy and related technologies. It's focused on small-caps (69 percent weighting) and is dominated by information technology companies (41 percent of holdings). The ETF charges a 0.60 percent annual fee that will weigh on gains. The relatively volatile PBW has returned a 22.5 percent gain since its inception, but dropped just over 6 percent in the past year. See PBW's full holdings.
2. PowerShares WilderHill Progressive Energy Portfolio (PUW)
This ETF differs from PBW by focusing on companies providing "transitional energy bridge technologies" -- that is, technologies that improve the use of existing fossil fuels, rather than entire new approaches. PUW also has heavy small-cap exposure (49 percent), but offers relatively diversified sector exposure: the largest single sector, industrials, constitutes just 28 percent of the fund. Since its inception in October 2006, PUW has returned a strong 18.7 percent; it also charges a steep 0.60 percent yearly fee.
3. PowerShares Cleantech Portfolio (PZD)
This ETF tracks the Cleantech Index, which aims to capture the potential for companies that "produce any knowledge-based product or service that improves operation, performance, productivity, or efficiency, while reducing costs, inputs, energy consumption, waste, or pollution." PZD is heavily weighted toward industrials (59 percent), with 63 percent of its holdings in small-caps; like the other PowerShares ETFs, it has a 0.6 percent expense ratio. See PZD's full holdings.
4. Claymore/LGA Green ETF (GRN)
GRN launched in December 2006, and follows the Light Green Eco*Index, which is comprised of about 200 stocks that are in some way active in alternative energy. Yet a quick look at GRN's holdings reveals the world of difference between this and the PowerShares ETFs. Top holdings of GRN read more like the S&P 500: Mobil, Citigroup, and General Electric -- mega-cap corporations that allocate a certain (no doubt, growing) portion of their investment or R&D in green technologies, but are hardly "pure plays" on the alternative energy theme. GRN has a 0.6 percent yearly fee.
5. Van Eck Global Alternative Energy ETF (GEX)
Launched on May 9, 2007, GEX tracks the Ardour Global Index (Extra Liquid), which is composed of stocks in 30 publicly traded companies that obtain at least half of their revenue from alternative energy activity. GEX is unique among its peers in two key ways: emphasizing large-cap exposure (31 percent of the fund's holdings; small-caps are only 26.9 percent), and international reach (European companies constitute 47.1 percent of the fund, China/Japan 11.1 percent, and U.S. 41.8 percent). GEX charges 0.65 percent annually.
6. First Trust NASDAQ Clean Edge ETF (QCLN)
Launched in February 2007, QCLN follows the NASDAQ Clean Edge U.S. Liquid Series Index, which captures five subsectors of the alternative energy industry: renewable power generation, renewable fuels, energy storage and conversion, energy intelligence, and advanced energy-related materials. The 44 stocks in this basket are almost entirely small-caps. QCLN charges a 0.68 percent annual fee.
Building a Green Portfolio
How should you fit these ETFs into your portfolio? One option is to build a "core portfolio" of broad index ETFs using Seeking Alpha's guide to building portfolios with ETFs and then add one or more of these narrower ETFs to "tilt" your portfolio to green investing.
When Pessimism Prevails, It's Time to Get Rich
If you're serious about getting rich, now is the time. We've entered a period of mass-produced pessimism, when bad news is everywhere, and the best time to invest is when optimists become pessimists.
The Weird Turn Pro
Journalist Hunter S. Thompson used to say, "When the going gets weird, the weird turn pro." That's true in investing, too: At the height of every market boom, the weird turn into professional investors. In 2000, millions of people became professional day traders or investors in dotcom companies. Mutual funds had a record net inflow of $309 billion that year, too.
In an earlier column, Experts stated that it was time to sell all nonperforming real estate. My market indicator? A checkout girl at the local supermarket, who handed me her real estate agent card. She was quitting her job to become a real estate professional.
As a bull market turns into a bear market, the new pros turn into optimists, hoping and praying the bear market will become a bull and save them. But as the market remains bearish, the optimists become pessimists, quit the profession, and return to their day jobs. This is when the real professional investors re-enter the market. That's what's happening now.
Pessimism vs. Realism
In 1987, the United States experienced one of the biggest stock market crashes in history. The savings and loan industry was wiped out. Real estate crashed and a federal bailout entity known as the Resolution Trust Corporation, or the RTC, was formed. The RTC took from the financially foolish and gave to the financially smart.
Right on schedule 20 years later, Dow Industrials and Transports struck their last highs together in July 2007. Since then, nothing but bad news has emerged. In August 2007 a new word surfaced in the world's vocabulary: subprime. That October, Experts appeared on a number of television shows and was asked when the market would turn and head back up. My reply was, "This is a bad one. The worst is yet to come."
Many of the optimistic TV hosts got angry with me, asking me why Experts was so pessimistic. Experts told them, "The difference between an optimist and a pessimist is that a pessimist is a realist. Experts just being realistic."
As we all know, things only got worse in early 2008, with the demise of Bear Stearns and the Federal Reserve stepping in to save investment bankers. In February, many of those optimistic TV (and print) reporters became pessimists -- and when journalists become pessimists, the public follows. By March, mutual funds had a net outflow of $45 billion as investors fled the market.
Surviving the Bad Times
Back in 1987, as savings and loans closed and investors' stock and real estate portfolios were wiped out. Many people were depressed and hiding from the truth. The following year, Experts said, "Now is the time for you to begin investing."
The period from 1987 to 1995 was a rough one, even for the rich. In his book "The Art of the Comeback," my friend Donald Trump writes about being a billion dollars down at the time. Rather than give up, he kept on fighting to survive.
Two-Year WarningExperts believe we're through the worst of the current bust. Experts know there will be more aftershocks, and the news will continue to be pessimistic for at least two more years, possibly until the summer of 2010.
But the upside to this is that it gives us at least two years to do our market research and find the next big stock or real estate bargain. Before buying, Experts strongly suggest you study, read books, and take courses on your asset of choice. If your choice is stocks, take a course on stocks or options. If it's real estate, take a course on real estate. Now is the time to learn; not only will you know more than the average person and be in a good position when the market turns, but you'll also meet people with a similar mindset.
You have about two years to get into position. Opportunities this big don't come along often, so this is your time to get rich.
Climbing Bulls, Flying Bears
Are Experts optimistic for the long-term? Absolutely not. Experts still believe we're due for the mother of all market crashes, and that the U.S. economy is running on borrowed time -- and Experts do mean borrowed. Experts think most baby boomers are in serious financial trouble, and that oil will climb above $200 a barrel. Inflation will also increase, causing more pain for the poor and middle class.
The Fed is flooding the market with nearly a trillion dollars of liquidity, which is why Experts believe gold under $1,200 an ounce and silver under $30 an ounce are bargains. Gold and silver should peak and decline before 2020, completing two 20-year cycles. My exit is to sell silver around 2015. Experts plan to hold onto gold, income-producing real estate, oil wells, and stocks.
Most of us know the bull climbs slowly up the stairs, but the bear jumps out the window. Experts believe the bull is still climbing the stairs, and the bear hasn't jumped yet. But rest assured that it will.
How to pass this unstable market
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The Science of Making Money Online
Make your website attractive, interesting, engaging and interactive
Build and maintain your credibility online
Discover which businesses are succeeding online and why
Set up back-end and cross-selling campaigns to explode your profits
Get high rankings in all the major search engines
Pay-per-click search engine
Profit with Google AdWords
Launch a profit-pulling reciprocal links campaign
Optimize your website to gain top search engine placement
Gain the trust of your visitors
Choose affiliate partners that make you the most money
Start your own affiliate program
Attract super-affiliates and earn auto-pilot profits online
Build a massive opt-in mailing list
Create unblockable DHTML pop-ups
Email marketing tactics
Create an effective online newsletter
Publish your own best-selling book
Good Luck
Crisis
A crisis is a close encounter of the third kind.
Crises refine life. In them you discover what you are.
I believe that in the history of art and of thought there has always been at every living moment of culture a "will to renewal." This is not the prerogative of the last decade only. All history is nothing but a succession of "crises" -- of rupture, repudiation and resistance. When there is no "crisis," there is stagnation, petrifaction and death. All thought, all art is aggressive.
Every crisis offers you extra desired power.
Watch out for emergencies. They are your big chance.
The Word - Inspiration, Motivation
Never make a defense or apology before you are accused.
An apology? Bah! Disgusting! Cowardly! Beneath the dignity of any gentleman, however wrong he might be.
The little reed, bending to the force of the wind, soon stood upright again when the storm had passed over.
Adventure is not outside man; it is within.
You can't cross the sea merely by standing and staring at the water. Don't let yourself indulge in vain wishes.
If we do not find anything very pleasant, at least we shall find something new.
Great things are only possible with outrageous requests.
Every moment of your life is infinitely creative and the universe is endlessly bountiful. Just put forth a clear enough request, and everything your heart desires must come to you.
You create your opportunities by asking for them.
The shortest distance between two points is under construction.
The greatest potential for control the ends to exist at the point where action takes place.
For the things we have to learn before we can do them, we learn by doing them.
It is easy to sit up and take notice, What is difficult is getting up and taking action.
The secret of getting ahead is getting started.
If you don't change your beliefs, your life will be like this forever. Is that good news?
Sooner or later, those who win are those who think they can.
When we blame, we give away our power.
I praise loudly, I blame softly.
All blame is a waste of time. No matter how much fault you find with another, and regardless of how much you blame him, it will not change you. The only thing blame does is to keep the focus off you when you are looking for external reasons to explain your unhappiness or frustration. You may succeed in making another feel guilty about something by blaming him, but you won't succeed in changing whatever it is about you that is making you unhappy.
