LilBob

Investing in Deflationary Times

I have to agree with Alan. There really isn't any investing advice here. Not even a reiteration of the "Buy Low and Sell High," philosophy.

I'll go ahead and put my two cents in. There are two areas that I think are worth investing in, and one of those areas is now down to a single company: Ford. Normally I don't care to name individual companies in this kind of forum, but as the strongest of the big three I believe Ford is in a position to see significant gains as soon as the economy starts picking up. News stories about the big three bailout have also provided free publicity for Ford Motor Company-specifically the fact that in recent reliability tests some Ford products are on par with Toyota and Honda in Initial quality surveys. Last I checked Ford stock is all the way down to 2.18 a share, and at that price I think it's a pretty safe bet. Just expect a long-term hold, this one won't pay off for awhile.

Another area that I see as strong are private label food brands. This is a pure "social utility," pick; if people are looking for ways to save money, invest in those alternative products that they will turn to when they want to save money. Private label brands are the companies that manufacture grocery items and label them for different regional grocery chains. Many of these private label brands are now producing items that are on par with national brands for quality, but at significantly cheaper prices. I shop at Wegman's grocery stores, an upstate NY chain, and I feel the quality of their store brand items is always at least as good, if not better than the national brands.

Finally, local entrepreneurs. I really think now is the time for investors to start "going out on their own," and looking for ways to provide start up capital for local small businesses. You have to be a real shark to do this properly. If you're prone to sales pitches this is the worst possible area of investing for you. A good rule of thumb, if you pay your credit cards off every month, or just generally don't use credit cards at all, then you might want to consider the local entrepreneur angle. If you carry a significant balance, then you're too green, you'll most likely end up losing your shirt.