Tough Times Call For a New Strategy

When faced with tough economic times, it is important to review your investment strategy and make adjustments in accord with the changes in the direction of the economy. With seemingly no end to massive government spending in the foreseeable future and no provisions made to pay off excess debt, with the exception of some ill advised tax increases, I've decided to take a different approach. Robert Kyosaki, one of my favorite best selling authors, says that the rich make more money in a downward trending market than one that's going up. So I've taken a position in Proshares TWQ exchange traded fund. It is a leveraged ETF that shorts the Russell 3000 index of stocks. While I believe the stock market will eventually recover, I'm hedging my bets by shorting the market.

Another idea I'm looking at is investing more money in foreign shares. I like the fact that the government of Brazil is cutting spending to address their budget shortfalls, as opposed to increasing deficit spending the way our government has. While working with some good people from India on my last job location, I also came to appreciate their strong work ethic and entrepreneurial spirit, something we could use a whole lot more of in the U.S.. So I will be looking at ways to invest in India as well.

While this does represent a new approach to my investment goals, my overall strategy is still the same. Which is, to build a well diversified portfolio of dividend paying stocks to generate a steady stream of present and future income. There is always a way to reach your goal, you just have to find it. During these tough times, as investors, we need to stay on top of changes in the economic environment and change our strategies accordingly.