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Economic Survival Of The Fittest: Which Investments & Jobs Will Die and Which Will Survive?

19 November 2008 One Comment

The economy is in shambles. Companies and, in some cases, entire industries are going under. What does this mean for you, your investments, your job, your income? Let’s discuss some of the possible economic areas yet to fall that might be likely. Let’s also discuss the best way to survive and even thrive during this time.

Retail

The American consumer is barely breathing with the two major sources of spending, home equity and credit cards, being shut down. The holiday season is likely to be a disaster for retailing.

Circuit City and Linens n Things have already gone down. In my opinion, many more are coming. If you work for a major retailer, your job is definitely in jeopardy. If you work for a surviving retailer like Walmart, you still might get your hours cut. The only bright spot in retailing is Apple, who continues to add jobs and open stores.

What other retailers are likely to go under? How about Office Depot? From personal observation, I never see anyone in their stores and their stores are huge! What about Sears? Blockbuster? More major retailers are going down, let’s wait and see who it is.

I’d recommend against investing in any retailer. If you need to invest in one, make sure it is a leader in its area such as Best Buy or Walmart. Otherwise, stay away!

Companies Likely To Survive

The companies that have strong balance sheets, sell products and services with stable demand are likely to survive a serious economic downturn. One of my favorite companies with this description is Philip Morris (PM).

Companies Likely To Thrive

While no company will thrive during the recession and stock prices will suffer no matter how well business is for any company during a bear market, some strong companies can position themselves accordingly to dominate when the economy rebounds

Innovation is where the job growth will be. Innovative companies will come out on the other side of the recession looking great. If your company is an average company in an industry full of competition and are simply waiting out the tough times, your company is not likely to bounce back significantly even when economic conditions improve. A slow economy is an opportunity for companies to position themselves, get better, become more efficient, create new offerings. These companies will be stronger after the recession! The problem is that it is tough for companies to innovate when they are strapped for cash. Creativity is a must.

My favorite company to invest in during this time? Apple! They continue to innovate and have a bullet proof balance sheet. For more reasons on why to accumulate Apple shares, click here.

Conclusion

It’s time to take a hard look at the company you work for and the companies that you are invested in. How is their balance sheet? Do they have cash to operate during tough times? Are they a leader in their industry? What are their plans to improve operations during a recession? If you can’t answer these questions, you might want to prepare your resume or find some new investments.

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