How To Invest When Market Is Down

By: Tony Clifton
Some people have the luck to live most of their active life in calm and prosperous times. What about you? Oh well, you don't even need to tell me. We live in these crazy times together. We don't have the luck of those people.

Does that mean that we should give up investing just because the markets are crazy, stocks are going down and we smell the ghost of deflation? No, not at all.

In fact though times for the markets are best for the smart investor. I'll give you some simple beginner investing tips that can help you invest like the pros - and even much better than them.

When markets are in mass panic, then is the best time to buy
When a recession or financial crisis is coming, people start being afraid that the things can go much worse. Why were not they afraid of that when the prices of their investments were high? You have much less to lose when buying low as compared to when the markets are growing. Besides that, markets go in cycles - low times follow high times and the other way around. You should worry most when everything seems bright on the financial markets.

You can only win if you buy when everyone sells in panic. Even if you don't buy exactly at the bottom, you'll still need much less time to reach big profits compared to everyone else (yes, including those mutual fund managers).

Recession is great time for real estate investing
The panic of recession does not cause just stock sales. Financial crisis often causes apocalypse at the real estate markets because the banks increase the interest rates and start giving loans harder. The higher rates lead to many people's inability to pay their mortgage and as a result they lose their homes. At the same times the demand of houses goes down because of the harder access to loans and it becomes even harder for these homes to be sold.

This leads to very low house prices which of course is excellent news for the smart investor. If you have the money, buy real estate when everyone is selling.

At low markets you can easier find out what assets have real value
When the markets are growing and the prises of everything only go up, it's hard to distinguish which assets have real value and which are in bubble. It's not like that when the market is down. At a down times the bubbled assets lose value like crazy while other lose just a little of their price or stay at the same levels.

It's wrong to think that you should buy only the assets that have lost a lot of their value in the crisis. The ones that have not lost are still good because they are really valuable and not bubbled. With the bubbled assets you can target aggressive gains with some risk (if you don't catch the bottom). The really valuable assets will not bring you such big profits but they are secure and will never crash as bad.

Finally, when the market is down, the buyer is the king.
You can negotiate your deals. You can negotiate prices of real estate, construction projects, investments, hiring people and so on. There is no better time for the one who has cash than recession.

You don't need to be a guru to win from a down market. All you need is patience and basic beginner investing knowledge - you can gain it on our site hywd.info. It will help you learn not only passive investing, but also how to make wealth without taking big risks.