An ancient philosopher once said "May you live in interesting times", and we certainly live in interesting times these days! The recession that began towards the end of 2008 and has stretched into 2010 with little signs of lessening anytime soon has made us all stop and think about our investments in many different ways.
When the recession began the first thing that crashed was the stock market. Many people suggested that this recession was fueled by the financial sector meltdown. They were talking mainly about regular banks and also investment banks as well. For whatever the reason, the stock market became a very dangerous place to invest in at the beginning of the recession.
While the stock market has come back to a large degree since its lows during the beginning of the recession, it's still a rather dangerous and precarious place to keep your money. Or is it?
Once people started digging a little deeper they realized that the financial sector was melting down because the housing sector and the real estate sector had become massively overheated... what we commonly refer to as a bubble that had finally popped. It was the default of thousands upon thousands of mortgages, to a large degree, that caused the banks to meltdown in the first place, which then caused the stock market to crash.
It's very convoluted and even today we are still not entirely sure which came first the chicken or the egg; the housing market meltdown or the banking sector meltdown, but it doesn't really matter because the question that remains is this: what in the world can we invest in now that the two main investment industries, the stock market and real estate, have imploded?
Well that's a very good question and it's exactly what I wanted to discuss in this article today.
Some of the best times to invest, historically speaking, are when everybody else is panicking and certainly we've seen a lot of panic within the last couple of years. Does that mean it's time to get back into the stock market or the real estate market? Maybe...
The fact of the matter remains that there are some incredible deals out there in both the stock market and the real estate market. I know many investors who have invested heavily in real estate who are now underwater with their mortgages because the properties are no longer paying off the same level of income that they use to.
This is because of several different reasons including their inability to keep tenants who've lost their jobs because of the recession and their inability to refinance mortgages at lower rates because the credit markets are still frozen to a large degree.
What all that means is that if you have money available at the moment, there are great bargain basement deals to be had in both the stock market and the real estate market, you just have to be smart, do your homework, and take advantage of a little bit of luck!