Putting Your Money to Good Use
Of course, however you need to know where you should put your money during these troubled times. If you are already a dabbler in stock markets recession does not mean that you should monetize all your stocks. Quite the opposite because we all know that when you sell out of fear or panic you could stand to lose tons of money. If you haven’t started investing yet there are places where you could put your money and come out of the recession in good financial shape.
During times of recession there is much doubt if it is the time to invest your hard earned money. From the layman’s point of view investing in the stock market should be a long term strategy. Short term trading in the stock market is for those people who have substantial know how of the companies whose stocks he is buying.
Recession Investing / Safety First
There are several factors that need to be considered before you jump in. How safe would your money be in this investment? This will be one of your foremost concerns. Economists will often tell you that there are no risk free investments. Even savings accounts have the chance of defaulting although the chance is quite low and of course there is insurance. But the rule of thumb always is the higher the yield the riskier the investment is.
Recession Investing / Moving Your Money
Your next concern will be how liquid is the investment. The liquidity of an investment means how easy is it to convert to cash. Some very attractive investments have the downside of that you have less access to your cash. So the question of how quickly you can cash out of your investment might be important to you when an emergency rises.
Recession Investing / Bonds
This is an especially good time to consider bonds. The ratio of stocks to bonds should be reassessed. Investment grade corporate bond funds are looking better than even government bonds. US 10 year Treasury bonds are yielding 5% which is lower by 1.5% than the 5-10 year corporate bonds. The return is even higher for the 20 year corporate bonds which average at 7.8%.
Those higher returns obviously mean a higher risk which is intrinsic in corporate debt as compared to the US Treasury. Although the number of corporations going bankrupt is increasing as the economy worsens, the risk to investors is still quite low with the default rate at less than 1% as contrasted to much riskier junk bonds or high yield bonds.
Recession Investing / Mutual Funds
Another option for the layman who does not have much knowledge or for that matter channels of information about market and financial conditions is the mutual fund market. Mutual funds are set up by investing companies who realized that there were people who wanted to invest in stocks and other financial instruments but did not possess the knowhow. Mutual funds earn their money by charging for services provided.
How Can A Small Business Ride Out The Recession?
A small business can ride out the recession by the goodwill and the reputation that it has acquired throughout the time it has stayed in business. The goodwill that your old patrons feel towards your establishment will keep them coming back to you. The reputation that spreads because of this goodwill will bring in new customers.
Reputation is priceless in business when you have a sterling reputation and you back it up with the value of your products or services then you will have a solid business that will be ready to ride out and come out of a recession in good financial shape.
Recession Investing / Promote Your Review
Excellent reviews from experts and other worthy bodies will enhance the good reputation that you have. When these rave reviews are displayed in unique professionally crafted and artistically created plaques in strategic locations in your place of business your patrons will know that they have come to the right place where they will get their money’s worth.
You can see these plaques and learn more about how theese products can add value to your establishment by going to In the Spotlight.
Thank you for visiting the recession investing page. For more information about proactive things you can do during a recession use the following links:
Do you know How to Survive a Recession? Answers reavealed here.
Learn how to make the most of your money grow. See the Recession Investing page.
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