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It’s been a brutal and unpredictable month for world financial markets , with problems in credit markets, drops in stock values and a wild ride in foreign exchange markets. Oil and other commodity prices, fell sharply from their peak, rebounded and fell again. The oil market has focused on big drops in US demand, virtually ignoring supply and refining problems related to Hurricane’s Ike and Gustav. Economic indicators that had held out a strong picture of the economy through months of mediocre growth are starting to show strain. In this situation, what are the best financial options? How can you protect your assets or even make money? What’s the best way to invest during a financial crisis?

One option is certainly to join the “flight to quality” and ride out the storm. Sell stocks and more volatile investments in favor of precious metals, cash, insured bank deposits and government securities. There is a risk even in such a move though. Many others have already made that move, bidding up the price of “safe” assets and bidding down stocks and when things calm down the money will move the other way, making it necessary to time the market to avoid losses even with this “safe” plan.

Those already in the stock market may want to consider staying there. The choice depends largely on whether you think the market is near the bottom or has a lot further to fall. If it’s near the bottom, selling now just locks in the losses. If it has further to fall, it could cut the losses and open up the possibility to get back in after the market falls a bit more. Those not in the stock market or wanting to reallocate stocks, may want to consider some countercyclical stocks that run opposite the market or stocks that consistently grow despite market trends.

For those interested in making substantial returns, risk means potential reward and down markets mean an opportunity to buy low - half of the formula for profits “buy low, sell high.” Of course, with higher risks it’s best to get in the game with money you can afford to lose. For those wanting to speculate in markets with relatively low costs for relatively high potential returns, options and Forex trading offer great opportunities.

This post is for informational purposes only and is not intended to provide specific financial, investment, tax, legal or accounting advice for you, and should not be relied upon in that regard. The Information is believed to be accurate and reliable when posted, but is not guaranteed and may not be complete or current at all times.