How To Protect Your Investments When Markets Are On The Edge Of Collapsing. Article

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How to protect your investments when markets are on the edge of collapsing.

No one knows when a stock hit's bottom, so buy in smaller packages as price move lower, this way, when stock have reached the bottom and starts to climb back up again, you will have a better average price and have a greater return on your money.

Author: Mike Dawson

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Yesterday, Thursday the 22 of September 2011, investors all over the globe have witnessed a deep cutthroat market fall.

Are we living the 2008 crisis, all over again?

Since it creation, the stock market has lived through many recession, including the 2008 recession, that was probably the second worst in its history, just behind the 1929 crash.

No one can forget the horrible crash of 2008! It left so many people in despair. The downhearted sentiment of being beaten-up every time you take a look at the charts, until paranoia takes over, leaving us in a state of hopelessness. Yes, the financial crash of 2008 still leaves the burden of its past, as the next one seems to be on the rise.

One huge question remains! Are we closer to end of this market downfall or are we at the beginning of it?

My best advice, and I urge you to consider this one, is to play it safe. If you don't know how to place stop orders when investing, then you should not get caught up with any stock buying. Purchasing stock during these harsh times, could easily drag you into a vicious down trend in no time. You should not put yourself into a losing position, like holding on to a falling stock because you haven't placed an order stop. Another wise move, is not to buy all your shares at once. No one knows when a stock hit's bottom, so buy in smaller packages as price move lower, this way, when stock have reached the bottom and starts to climb back up again, you will have a better average price and have a greater return on your money.

So, what are our chances of avoiding another recession?

To answer these questions, we should take the 2008 crash and compare it with the probability of a 2011 recession

The previous recession was triggered by deregulation's in the financial institutions, making it an easy pray for greedy and dishonest individual to fraud the baking, lending, and credit system. This resulted into a global financial meltdown.

This time around, the probable causes for another recession will be triggered by dept and bad political management. The credit problem is no longer an issue. The solution depends merely on the people we have elected.

So the fundamental core of the economy ( the small and big businesses) are actually in good health, it's the leadership at the government level that is questionable. Our political leader just can figure out how to settle the job issues and how to resolve the debt ceiling.

Governments, especially the USA, have injected outrage amount of money, to boost the economy, by doing so, they ran out of money. Creating another stimulus, Qe3, will sink the whole nation into trillion's of debt for decades. If the Fed does provide another stimulus package, it will only be useful for a short time, afterwards, we will be in even deeper problems.

It's not too late. We need to see immediate action from Europe leaders, They and other country's politicians must come together as a collective group and resolve their debt issues.

So what is the best strategy for next week, my suggestion is to keep your money, don't invest right away, let it sink even deeper and use the tips I have provided in this article to gain momentum. In these times, the ones who will prevail, are the one who kept money aside, in order to attack the market instead of being attack by it.

About Author

Mike Dawson is an experience option trader, adviser and teacher.

Article Source: http://www.1888articles.com/author-mike-dawson-47068.html

How to protect your investments when markets are on the edge of collapsing.