Slower Growth Does Not Equal Recession

It was reported months ago that we might be headed for a recession. I even remember some experts who were broadcasting that news a year ago. Some even thought maybe we might be facing another depression. But, reading the economic situation can be confusing and a bit scary if you can't find the opportunity.

In fact, a recession would mean that our economy is in decline. Prices are up because supply is down. People are holding onto their money and spending less frivolously. The market gets sluggish because of the mass response, the simple Economics 101 stuff.

But when Federal Reserve Chairman Ben Bernanke insists that the U.S. is not headed for recession, my ears start to perk. When I hear that Bernanke forecasts slower growth in 2008, I am relieved. Slower growth is far different from a recession. Slower growth is still growth.

When a manager of a department store experiences a slowing in sales, at least there are still sales. But, the Big Heads are calling the manager and asking about the problem. What problem? There are still sales. There just aren't as much. No sales and more frequent returns would be a problem.

Slow growth means we're still moving forward. We're not watching our economic status go on the decline. Properties are still being built. Business is still moving. There is still progress. It's just not at the pace that we were used to enjoying.

Either way though, whether we experience slower growth or we go into a recession, there is always a way to protect yourself. It's called positioning. There is an opportunity in every economic situation you can encounter. You just have to know how to position yourself.

Buyer's Market or Seller's Market

I'm not going to dive into the lingo real estate investors and stock brokers use. Is the market in a long term uptrend or long term downtrend, the difference between a Bull and a Bear market? You don't have to know the lingo to be effective. Is it a buyer's market or a seller's market? If you're asking that question, then you are too late.

You should ask whether it is GOING to be a buyer's market or a seller's market? Then, position yourself when you know the answer. The difference between the two is who has the leverage. Let's use real estate as an example. The same information applies in stocks and any other investment for that matter. But, buying a house is so much more imaginable.

If you are buying a house in a seller's market, you are going to have a tough time getting the terms you want. The cost of property is rising and the rates are getting higher because in a seller's market, the banks and mortgage companies are taking advantage of the situation. That's positioning, having the right assets at the right time. In a seller's market, you want to have property to sell. In a buyer's market, you are looking for real estate to buy.

In a buyer's market, you can negotiate with a bank and get a deal on a foreclosure. That's how good the market gets when the Bears grab the Bulls by the horns. A bank is not a real estate agent. They will take a deal rather than no deal at all and lose altogether. So, keep your eyes on the upturn or the downturn. Position yourself.

Slower Growth Versus Recession

If Bernanke is calling for slower growth, act on the information. It is time to buy. Right Now! Growth will provide you with the leverage you need when people want what you have. You buy now and you buy low. You have the option of holding or selling later for 2, 3 or more times what you paid. I've seen people get in on penny stocks and make millions. Like hitting the lottery only you have a little more control.

Recession is a whole different monster. Don't buy. Sell because value is on the decline. Buy when it hits its low. Then, hold until it hits its high. Just like I said earlier, it's basic Economics 101 stuff. Position yourself.

Foreign Exchange

When your currency starts on the decline you can trade it for someone else's currency for more value. Now, you have leveraged yourself in the strongest game of all. Money is what it is all about. Governments experience variances. Exchange rates rise and fall just like any other investment in the world. The survey of France's Gross Domestic Product (GDP) will cause their currency to rise or fall. Be in position.

If you are looking to invest your money into foreign currency, look at the momentum and the average movement of the currency value first. Take a broad look at the country and observe their GDP, any trade reports you can find, the fluctuation of interest rates, and the employment situation. You'll see some interesting variables. Learning the formula is the key. If you stay on top of things, there is a thirteen hour window every day when Asia, Europe and New York are all awake and very active.

Map yourself a chart with the JPY, CAD, GBP, EUR, AUD, CHF and USD as well as anything else you want to follow. But, those seven are the major markets. You'll soon find that the variables make for interesting exchange scenarios. As opposed to the stock market, insider information is part of the public domain in foreign exchange trading. All news is released to everyone at the same time so you have the same opportunity to read the market just like everyone else.

Not many investors hold foreign currency. Most trades are made within 7 days while 40% of the trades are made within 2 days. Money is constantly moving and a profit always exists. In other words, there is no Bear market. Playing around with the exchange rates I have sitting in front of me right now, my information says that the Euro is going to rise. So, I buy 1 Euro for 1.058 USD. And like nature, the Euro does rise. I now sell my Euro at 1.059 USD which with the other factors involved in the trading practice clears me a nice $110 profit. That simple trade took one day to execute. That's just one small example with one simple Euro.

No matter what economic situation you have to face, there are opportunities. Positioning yourself for the advantage is what it takes to protect yourself from damaging economic swings. Make sure you understand the market. You don't need Economics 101. All you need is accurate information and know what to do with it.

Michael Allen is a business consultant integral in the success of several impressive business ventures including WebGNE LLC and Rivky's Art Workshop LLC. Having conducted research for such experts as Jay Abraham and Michael Masterson, Michael Allen has positioned himself as an invaluable voice in the world of Trade and Finance. Visit Michael's ForexYard for free media, reports and other materials.