by Anna Yarbrough

Created on: June 19, 2008   Last Updated: June 24, 2008

2008: When to Invest in Financial Companies Again

Considering the rough waters navigated by US financial companies over the last seven years, and in particular those currently challenging them, that's a valid question. Anyone who has participated in investment strategies at any level since the 9/11 attacks on the USA can attest to this. Although the rationale is far from simple, the simple answer to the question is NOW. Here's why.

First of all, let's define financial companies broadly to include banks, credit unions, investment houses, stock brokers, mortgage companies and insurance companies, thus encompassing a wide range of approaches to finance and financial strategies which ultimately can provide something for everybody's needs and interests. Therefore, I propose that the real consideration is rather how to invest, and in which financial arena rather than when. At any given moment in time there is a worthy investment to be made in a financial company of some sort somewhere.

For example, because we live in a global community, many investment choices offered through US investment firms position investors as participants in the market success of other nations. At present, as the dollar compares disproportionately low against the monetary value of many other nations, investors can recoup some of that disparity through international investments.

Currently folks who have found themselves caught up in the credit / mortgage crunch can invest in the credit industry and their own future by working out payment arrangements which are feasible for both the borrower and the lender rather than turning their backs on the credit company and their own borrowing future. By working out arrangements of mutual benefit to both parties, challenging circumstances can be endured and overcome in time, thus strengthening both parties.

If we consider the accomplishments of the stock market since 9/11, we cannot ignore the terrific comeback of the market! The folks who courageously continued to invest while the market was down and stocks were ON SALE cheap, reaped the reward as the market values of their stock purchases multiplied over time. Those who, in a panic, withdrew their investments completely, assurred a loss of revenue for themselves and the financial company. This is an occurrence regularly witnessed by those disciplined enough and patient enough to have invested a portion of their funds over time in order to achieve future rewards.

In fact, the recent catastrophe at Bear Sterns, which resulted in a hefty bailout by the Fed, created the opportunity for somewhat of a coup by Chase as the new recipient of the investment accounts once housed at Bear Sterns. This reinforces my assertion that how we can find ways to invest in financial companies which are in the best interest of the companies and ourselves is the wiser question than when we can.

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