Now a days it’s really hard to find any decent safe investments. The old buy and hold routine doesn’t work in these trouble times, and as for trying to day trade, you’re taking your hard earned money in your own hands.
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A safe Investment right now seems to be in CD’s, bonds and Treasury bonds, but the problem there is that the return is quite low. After having your portfolio, need it be a discretionary one or your 401K/IRA, beaten up as bad as it has in the last year. Some may not want to deal with a 3% return on their money and have it tied up for nine months or longer to get it.
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High yield safe investments like junk bonds aren’t any better. They involve alot of risk and again after what we’ve gone through, do you really need more risk?
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The only safe investment advice that I would be comfortable giving you is to do your research into strong companies (of course you won’t know they’re strong until after the research) that have been beaten up because of the market as a whole brought the price down.
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One company that has taken a beaten because of the hedge fund redemption is Quanta Services Inc. (NYSE:PWR). The company has a great balance sheet and has orders out until 2010. They are expecting great numbers in this quarter. Thursday the stock hit a new 52-week low at $12.27. A level that hasn’t been seen since February of 2006.
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I don’t consider too many stocks to be a safe investment the way the markets have been moving. Monday morning the DOW opened at 9,141.01 and the intra-day low on Thursday was 7,979.60, but then closed Thursday at 8,835.25.
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The safest investment right now might be not investing.

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photo by epic harmus

I know that it really isn’t a hostile one, but let’s be real. What is the federal government to do with the idea of being a mortgage lender? The federal government was never designed to operate in this manner. It’s bad enough that they’re the largest employer in this country.
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We as taxpayers are going to bear the burden of this decision by Henry Paulson and George Bush. I understand the reason behind the fact that Freddie and Fannie can not do the job, but to have the government step in is a little over the top. The two of them were created by Congress back in 1938 and 1970 to help support the housing market. Being a sponsor and taking over are two different things. Unfortunately our politicians can’t tell the difference. Senator Chuck Schumer, a democrat from New York said, “there is more flexibility on the part of the government to try and help the housing market,”
We see how well they helped the market when they were allowing anyone with a pulse to qualify for a loan.
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As for what the market thinks about this…
Mark Zandi, a chief economist at Moody’s Economy.com said, “Effectively, the federal government has now become the nation’s mortgage lender,” he said. “This takes a major financial threat off the table.” OK, maybe the rest of the financial sector will move forward from here, but don’t expect it anytime soon. I read this little tid-bit of information that Standard & Poor’s downgraded Fannie and Freddie’s preferred stock to junk-bond status, but reaffirmed the U.S. government’s triple-A rating after the Treasury department’s announcement. Go figure.
Analyst are predicting that this could cost taxpayers as much as $100 billion while the Treasury dept. tries to get a hold of the situation.
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All I have to say about this from a traders point of view is to stay away from these two companies and find something else to invest into. I do believe that we will see a rise in the financial stocks this week but who knows which ones will be the lucky dog or the lame duck. If you want to play this news, the only way that I could possibly recommend is to get in the financial ETF, symbol XLF.
Whatever you do, Please do your homework first since I’ve been known to make mistakes from time to time.

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ETF’s (Exchange Traded Fund)
Exchange traded funds, or ETFs as they are better known, combine some of the benefits of both common stocks and mutual funds. They trade like stocks and are listed on an exchange, yet they usually represent a major stock index, industry group, international country index, or commodity.
As defined on about.com
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Mutual Fund:
A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities (usually stocks or bonds). When you invest in a mutual fund, you are buying shares (or portions) of the mutual fund and become a shareholder of the fund.
As defined on about.com

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When you want to start out in the stock market and you don’t have a large amount of capitol (cash) ETF’s & Mutual Funds are the way to go. The reason behind that is, just like in a earlier post we stated, that being diversified is one way to weather the highs and lows of the stock market.
You also don’t have to know too much about any one stock or even knowing a handful of them. ETF’s basically follow indexes like the S&P 500, mutual funds are controlled by a fund manager who will make the decision for you and the other investors in the fund. It would be wise though to do your research on that manager to see how he’s handled other funds in the past.

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The are many different types of vehicles to invest in for your future or even for the present. When people think about investing, they typically think about retirement. Having money for the golden years is why investments are made. You get a job where you can start contributing to your company’s 401K plan & let the “experts” do the work for you for a fee. Wait till you’re 59 1/2 (to avoid penalties) & hope that they did good by you.
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I thought the same thing for quite some time & a few years ago I started to change that way of thinking. Even before I had capitol to invest on my own I was learning the stock market. When I started to invest my money, I wanted it to work for me in the near future since I was enrolled in my company’s 401K plan. What I looked into was an Investment property first. I learned about passive income as a way to subsidize my pay check & soon replace my job completely. I needed to have enough to put down on the down payment. Instead of depositing my weekly contribution in a savings or money market account, I opened a TD Waterhouse account & started to invest in ETF’s & Mutual Funds. I soon had a nice nest egg built up and moved more toward individual stocks that I knew from my research that their fundamentals were solid & that I could make a killing. my knowledge paid off & I was able to purchase a duplex apartment with 20% down. I now have an asset that pays for itself as well as an income.
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I still invest in the stock market & will continue so well into my retirement years. I enjoy what I do & will make money from it since I do my due diligence & leave my emotions at the door.

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