Friday, March 12, 2010

Investing in the Present Market

Investing in the present market is not simple, not that investing ever is, at any time.

But you can simplify the process a bit by specifying your aims. Financial media reports and suggestions often fail to point this out.

Examples: Are your goals short term or not? Are you taking proper consideration of your age? What are your feelings about risks?

Also, consider the economy. We have more than an ordinary recession today. It may not bounce back for several years.

And inflation will be around, probably quite heavily, in a couple of years.

Economic stagnation and high inflation could be the types that stifle corporate profits. It means, also, that bond purchases ought to be in low-cost bond funds, with low duration, and with dividends that are periodically reinvested. (I have commented a good deal about bonds and inflation in the past and will in the future.)

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