Financial institutions are crumbling, the dollar is struggling, stock prices seem on an uncomfortable path downwards. So what does all this mean for your domain investment strategy?

I’ve been seeing quite a few arguments recently on the forums about which direction the domain market will go and even though stating this will probably make me very unpopular I’m veering towards the bearish viewpoint.

I’ve actually just had my best 2 week period since I got involved in this business and sold 9 domains, there are also quite a lot of additional offers on the table.

Now don’t get me wrong – this is great and I’m not complaining, but I just don’t see that it’s going to last, as the real economic pains are only just starting to hurt the average consumer and the domain market has been nicely insulated from this (at the top end)

The main enemy of sound economies is just starting to raise it’s ugly head and thankfully the majority of central bankers know how to treat this deflationary monster. But all it takes is one policy mistake or raise in rates to counter the short term inflation we are currently experiencing and we could find ourselves in a deflationary spiral that will destroy the values of “everything.”

Even if deflation doesn’t strike there are going to be strong cutbacks in consumer spending, which will of course have a knock on effect on companies marketing budgets, which will obviously have a negative impact on us domainers. The days of the spendthrift US consumer are coming to an end, lets just hope there’s someone else nearby who can pick up the baton and keep the good times running.

Going forwards I’m taking a more cautious approach to domain buying and putting away the machine gun and picking up my snipers rifle. So yes, I’m still buying. In fact seeing as I came to the domain game a little late, I see the next couple of years as a great opportunity to get some incredible names at bargain prices and build a very high quality portfolio.

So please don’t feel it’s all doom and gloom out there as this could end up being a very profitable and lucrative period for you. But the most important thing to remember in this current environment is not to overextend yourself – buy what you CAN afford and don’t risk the farm on a few bets.

There will still be the 6/7 figure headline sales, but these will be few and far between.

Obviously certain segments of the market will do better or worse than others. One this I feel has been hit quite hard over the recent months is the 3 letter .com market, and I feel the current prices are starting to reach a nice buying range, so I’ll be keeping my eyes peeled here.

But whatever happens the best thing you can do is remain flexible. Don’t just bullishly follow one strategy, be willing to change quickly if you see danger or opportunity ahead.

So what am I buying? Well I’m looking at two word generic .coms (WaterFountain.com, DietTips.com) I’m also buying hyphenated .coms (Solar-Energy.com, Custom-Car.com).

Remember at times like these cash is King and I think that those who have a certain amount of liquidity could find themselves picking up superb names at bargain basement prices.

James

Featured Domains:

Teddy-Bears.com - $10,000

U-S.org - $2,500

Firl.com - $9,000

NYholidayGuide.com - $1,500

If interested in any of the above please send mail to James@floatingmix.com with sold by the name. Buyer to pay Escrow.

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