How to Prosper in the Global Financial Crisis?

The media plays a powerful role in shaping our minds on the current financial crisis. News of doom and gloom permeates the media space. Somehow people love to flock to televisions and newspaper stands to read about calamities. As we glance the news reports, our senses are naturally programmed to be attuned to negative news. It attracts readers like honey attracts bees. The media knows, and capitalizes on it to propagate a surge of viewers to their websites. Focus on the gloom is the tactic.


However, we need to stand out from the crowd and look into the crisis with a new pair of lens - not the lens given through the news media. The chinese word of crisis so aptly describes the full understanding of crisis as finding opportunity in the midst of danger. We can ride the wave of this global financial crisis if we choose not be sucked in the spiral of pessimism together with the rest of the world. Remember, winners think differently. I'm not advocating a contrarian approach to investing but rather a holistic, focused and critical approach to the crisis.

How can you benefit or even prosper in this financial crisis?

Number one, in times of recession cash is NOT king. Wisdom is. Recession is defined as two successive quarters of economic contraction resulting in low or negative profits and high jobless rates. But think about it - money in the globe is circulated. Profits are never lost, but transfered. In times when fuel prices are high, the airline industry suffered but the oil and gas industry prospered. In times of recession, spending does not stop but rather controlled. Everyone needs to eat, drink and relax whether we are in economic downturn or upturn. The key is to ride on the recession mentality - prudent spending and safe investment. If you can provide these two values to people, you are riding on the wave and not sucked in the spiral.

Number two, in times of recession ride on the primary emotion. Never try to move against market sentiment. If the market is bearish, try shorting successively (according to your risk portfolio). If the general sentiment is fear, do not strive to negate the fear in your solutions but rather confirm and help people to overcome the fear. Build solutions that help people win and not just bring profits to yourself. Real value is recognized even during recession.

Number three, in times of recession know what is important. Health is; money is; survival is; hope is. Would people prefer jeopardize their health just because they are in a financial crisis? I doubt so. Rather, people will switch to nutritional products that gives more for less. Would investment be less popular? I doubt so - everybody still wants to save for retirement! Rather, people want investments that are more transparent, well regulated and securely guaranteed.

In essence, you need to know where to stand to draw the profits. People's needs will not change, but rather modified to adapt to the financial crisis. Knowing how to flexible in times of crisis and adapt to the changing market is pivotal not just for your prosperity but your survival in this economic mayhem.