What Is The Best Investment In A Recession?
If you're nervous about the market, and have been sitting on the sidelines, here are some ideas for you to choose what could be the best investments for your portfolio. (Note: These are just ideas to consider and not recommendations; any investment decision you make should be based on your personal financial goals and risk tolerance.)
Stocks: Gone is the buy and hold mentality from stock investing, since last year's downturn. This doesn't mean yo shouldn't buy stocks, just don't expect to buy them and do nothing else for fifteen years while they grow into wealth. With the economy still a bit shaky, keep watch over your investments to make sure they're performing as you need them to. Choose large, brand name companies, the ones that perform well regardless of the market, because consumers love them, or their products are the ones we can't do without. Focus on companies with strong balance sheets, meaning low debt, good revenue and cash flow.
Bonds: Bonds may be considered a safer investment than stocks, but you still have to actively monitor their performance. If for example the company fails, as a bondholder you can still be impacted negatively. For Treasury bonds, lately yields are at extreme lows, and even went negative! So remember that low risk means low return, and balance that with your overall financial strategy. Also research municipal bonds, agency bonds, utility and corporate bonds. As with stocks, select bonds backed by healthy companies or agencies.
Money Market accounts and CDs: The rates on these investments are very low, as these operate similar to a savings account. Usually these accounts are insured, but not always (check with the bank to find out). They are very safe investments, but have low returns as a result. These might be the best investment for someone nearing retirement, or a parent who is about to pay for college in the next year or two. These are also a place to keep some percentage of your money while looking for other investment opportunities.
Your selection of the best investment will be the one that is right for your. Put together a personal financial plan so you have a framework for choosing the right investments. By taking the time to plan, you'll have a foundation for choosing investments that will help you reach your goals. - 23162
Stocks: Gone is the buy and hold mentality from stock investing, since last year's downturn. This doesn't mean yo shouldn't buy stocks, just don't expect to buy them and do nothing else for fifteen years while they grow into wealth. With the economy still a bit shaky, keep watch over your investments to make sure they're performing as you need them to. Choose large, brand name companies, the ones that perform well regardless of the market, because consumers love them, or their products are the ones we can't do without. Focus on companies with strong balance sheets, meaning low debt, good revenue and cash flow.
Bonds: Bonds may be considered a safer investment than stocks, but you still have to actively monitor their performance. If for example the company fails, as a bondholder you can still be impacted negatively. For Treasury bonds, lately yields are at extreme lows, and even went negative! So remember that low risk means low return, and balance that with your overall financial strategy. Also research municipal bonds, agency bonds, utility and corporate bonds. As with stocks, select bonds backed by healthy companies or agencies.
Money Market accounts and CDs: The rates on these investments are very low, as these operate similar to a savings account. Usually these accounts are insured, but not always (check with the bank to find out). They are very safe investments, but have low returns as a result. These might be the best investment for someone nearing retirement, or a parent who is about to pay for college in the next year or two. These are also a place to keep some percentage of your money while looking for other investment opportunities.
Your selection of the best investment will be the one that is right for your. Put together a personal financial plan so you have a framework for choosing the right investments. By taking the time to plan, you'll have a foundation for choosing investments that will help you reach your goals. - 23162
About the Author:
Looking for the best investment for your money right now? Sue Calhoun writes about contrary investing advice from not-the-usual sources.
posted by X - Men @ 2:07 AM
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