(please correct me if I'm wrong because I'm still trying to learn this)

In times of tight credit (~deflation), your investment dollar goes farther because less people are willing to invest/lend. This drives down the price of investments as people "cash out before they loose it all".

Legendary investor Warren Buffett has said "Be fearful when others are greedy, and be greedy when others are fearful." The former describes a bubble, when loan sharks and financial jackals are creating money and driving prices up - be fearful of the burst. The latter describes a bust, when people panic and sell, or hesitate to invest - snatch up the good deals.

Now may be a good time to buy into under-priced quality companies, both expecting their stock price to go up and expecting dividends from their earnings (though meager, the quality companies may still scrape together something).

Maybe buying into real estate is a good investment now. Get a condo and rent it out, planning to keep it long term or at least until the real estate market rebounds.

There must be ways to legitimately profit (none of this day trading, short selling crap) during a down market.