This is a larger question. You can make money off the market in more ways that buying in. You can use it to plan your own business and capitalize on upswings in your segment. For instance...
In telecom there is always a 5-7 year swing. In the late 90's for instance, just as in the late 80's, a cable guy could make around $2,000 per week...by 2002 that was cut by over 25% due to the dot bomb. Over the next few years it creeped back up especially with advanced in satellite television. Last year, prices were slashed and once again that particular workforce suffered pay cuts.This year and next there is newer technology rolling out from AT&T..remember them? They always fall out and then all but disappear, only to show back up with some new techology that requires special training.
The market crashes out on the same schedule...remarkable about the same time people seem to think that things are so great and are spending money like they can always make more because they have for so long. Then all the sudden the adjustments hit and everyone goes into a panic, discretionary spending stops.
This hit me this year right after the housing crunch. Unfortunately for me I overestimated the time I had left (I'm dependent on the car sales market for 80% of my income) and made a bad decision to add personnel. Now my segment is in a major uptic and I'm swamped again...but lost my added technician becauseI didn't have the work to keep him making money like he can now. He spun off and started his own but is doomed to fail due to lack of experience in a lot of areas. He'll look back and think it was just the wrong time...it isn't, but for him there are more factors now.
The key to make it out with more and not less is to look back at the segments that do well in the same place we are today in the curve. Not necessarily looking for a specific company or brokerage, but a segment. If anything it's probably getting close to time to buy into housing and the peripherals that go with it like contruction materials. Maybe wait a little longer for them to bottom but they have to be close now.
Before the other two careers I was in contruction materials. We had the same 7 year swing, it just didn't run along the same timeline as the rest of the market. For instance in the mid 90's ready mixed concrete materials companies were having a really hard time due to low demand, combined with the cement suppliers slowing down production to increase price. Get this...they worked less, and were able to charge more for the same product because there was less of it. So they CUT labor costs and increased PRICE. It forced a correction on the concrete companies, all of which operate like any business, profit is a percentage per piece, not flat dollar amount per sale, so profits for them went up too...by the time they adjusted, the housing market was back on a uptic in the late 90's and slamming after the slow down of 2000-2002. They made more than they ever would have, and the cement suppliers are STILL killing it because they NEVER drop their prices one they go up.
Imagine having bought Lafarge, Trinity Construction Materials, or Cemex back in the 90's.
I'm pretty excited, because once you hit the bottom...you know the ride is about to take off and you can be on it if you plan right.
