The cover of the April issue of Money Magazine reads: “31 Ways to improve
your finances” and inside you will find great tips on how to counter act the damage that the recession has done to most of our portfolios.
A common theme through the pages and pages of great advice, is that investing
now is a great idea. The key to success is to understand completely what you are
doing and get the right advice.
So many people have stopped investing out of fear and kept their portfolio
completely liquid. Cash in the bank may give you a sense of security, but it won’t ever built your wealth. And Money says that too much cash in your portfolio will hurt your gains.
On the other hand, unemployment, a soft housing market and a volatile stock
market has made many of us confused and afraid of investing. So what are we
suppose to do.
According to billionaire Warren Buffett, “When it’s raining gold, reach for a
bucket, not a thimble.” (Money April 2010)
In other words, after you have built a reserve of cash to carry you through hard
times, invest your money and get it working for you.
Buffett’s advice is simple. Grab the bargains because those bargains won’t last
forever and concentrate on long term gains.
Obviously, I am bullish on real estate, especially since it fits the bill under
Buffett’s advice. Look at what he did in the face of the recession _ he spent millions buying distressed companies.
Buffett also follows another important caveat _ he stays educated on everything he does. Follow that advice, it’s incredibly important. If you do not have an investment plan, get one. If you don’t understand it, then learn it. Seek advice whenever you need it.
These are simple ideas but if you follow it, you will see your way clearly
through this downturn.