Trading Stocks in the Credit Crunch - Here is How I Am Doing It
You do not have to look hard to see that the worlds financial markets are in turmoil.
It is an incredibly hard time for private investors that are in many cases seeing their portfolios and pension funds fall in value.
In this article I will outline the strategy I am using to beat the credit crunch and keep my portfolio in profit.
The first decision I made some time ago is to get out of large cap financial stocks.
The current banking crisis is not going to disappear overnight.
All of the worlds large banks will feel the pain from this crisis for many years to come.
As a result I have shifted my stock investments away from this sector and pretty much away from the large indices in which they trade.
Instead I am focusing more on smaller companies as they are less reliant on the large banks for funding and are more likely to be able to achieve rapid growth during these economic conditions.
As information about these smaller companies can be hard to track down I use a the help of a professional service dramatically cut my research overheads.
I use a service that basically provides me with a short list of companies that has been produced by a computer program that analyzes thousands of companies.
This alone saves me hours and hours of research and means I only spend my time investing in companies that really are potential investment opportunities.
Next I immediately drop off the list any companies that have more than 25% of their capital funded by loans.
As the credit crisis is unfolding the costs of these debts is rising and rising so I feel I do not want to invest in a company that is not funded by either earnings or equity.
It is an incredibly hard time for private investors that are in many cases seeing their portfolios and pension funds fall in value.
In this article I will outline the strategy I am using to beat the credit crunch and keep my portfolio in profit.
The first decision I made some time ago is to get out of large cap financial stocks.
The current banking crisis is not going to disappear overnight.
All of the worlds large banks will feel the pain from this crisis for many years to come.
As a result I have shifted my stock investments away from this sector and pretty much away from the large indices in which they trade.
Instead I am focusing more on smaller companies as they are less reliant on the large banks for funding and are more likely to be able to achieve rapid growth during these economic conditions.
As information about these smaller companies can be hard to track down I use a the help of a professional service dramatically cut my research overheads.
I use a service that basically provides me with a short list of companies that has been produced by a computer program that analyzes thousands of companies.
This alone saves me hours and hours of research and means I only spend my time investing in companies that really are potential investment opportunities.
Next I immediately drop off the list any companies that have more than 25% of their capital funded by loans.
As the credit crisis is unfolding the costs of these debts is rising and rising so I feel I do not want to invest in a company that is not funded by either earnings or equity.
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