The harsh economic realities are all around us. The decline in home values, the number of foreclosures, the unemployment figures and the “going out of business” signs are all reminders that the economy is still “sick in bed” although there are signs of recovery.

Although many are hurting financially there are some who are actually profiting from the “sick” economy. One way they are doing so is by investing in the stock market.

But stocks are declining? EXACTLY!

Many stock prices are currently undervalued and poised to make a positive swing. They have taken quite a beating over the last 2 years and in some cases they have started to move upwards. Here are some examples:

COF – Capital One Financial: This stock was over $80 per share in 2008. In July 2009 it tanked at $19.73 per share and has increased to just over $40 per share recently. Even if you missed out on buying this stock at $19.73 and say you bought it at $25, you would have seen a the price rise by about 60% in less than a year. The S&P Quality Ranking for this stock is “A-” and some experts set the 12-month target price at $53.

CAT – Caterpillar Inc: The share price was $85.28 on April 18, 2008 and $23.23 on March 6th 2009. Experts like this stock a lot because of what the company is involved in and recommend it as a “Buy.” The S&P Quality Ranking is “A+” and some export set the 12-month target price at $88.  On Friday June 25th the stock closed at $64.71 per share.

VFC – V.F. Corporation: This is a global apparel company that owns a portfolio of brands in the jeanswear, footwear, outerwear, backpacks,  sportswear and occupational apparel categories.Their brands are sold in more than 150 countries through 47,000 retailers in all channels of distribution, from mass to department to specialty retailers. On July 28, 2000 the stock price was $22.06. The price rose steadily over the next 7 years to $94.51 on July 13, 2007 but fell to $42.80 on November 21, 2008. S&P Recommendation is a “Strong Buy” with a 12-month target price of $106.00. The S&P Quality Ranking is “A.” On Friday June 25th the stock price closed at $75.33.

NYX – NYSE Euronext: On November 24th 2006, this stock peaked at $108.26. On March 6th 2009 it hit bottom at $15.17 per share. According to some experts the 12-month target price is $36 and the their risk assessment is “High.”

DISCLAIMER: It is recommended that you gain a thorough knowledge of stocks and investments or consult an investment broker/banker before putting your hard earned cash into any investment.

Some great sources of valuable information about stocks, bonds, mutual funds and investment in general are:
The Motley Fool
Market Watch
MorningStar
The Street

There is a considerable amount of time involved in researching and picking stocks. If you let an expert do the work for you, there is a cost involved.

One alternative is to invest in a type of mutual fund called an Index Fund. “An index fund is a mutual fund that defines a group of stocks — an index — and then buys and holds them all, no matter how they perform. Index funds don’t have a professional manager at the wheel, choosing which stocks to buy or sell; instead, they simply seek to automatically replicate the returns of their specific indexes.” (Source: The Motley Fool)

Many index funds are based on major indexes such as:
The Dow Jones Industrial Average
The Nasdaq 100
The S&P 500
The Russell 2000

Some experts believe that index funds will be your best bet for solid investing performance. But the downside of index funds is the same as their upside: You’ll only do as well as the rest of the market. For that reason investment in an index fund should be for the long run.

Thanks for your time,
Yardie Luke