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: Investing in stock will require you to be a little more active in managing your investments; the days of buy and hold are likely gone for good. Since the economy is still not back to top performance, you'll want to stay on top of your investments to ensure they continue to perform. Invest in the big name companies, those companies which perform in both good and bad markets. These are companies consumers continue to buy, their products are everyday necessities, and the management has maintained good revenues, low debt and adequate 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.
CDs and Money Market accounts: These investment vehicles are as close to savings accounts as you can probably get. They also have very low interest rates right now, even with large deposits you will likely find rates under 3% or 4%. Remember though that most CDs and money market accounts are insured (but not all - check with the bank you're buying from). With rates this low, you want to consider taking a little more risk, unless you are facing retirement, or paying for college in the next year or two. But again depending on your personal goals, keeping some portion of money parked in these safe investments might be a good idea.
There really isn't a best investment that works for everyone. Whatever you choose in your investment account should be based on your personal financial strategy. Don't let anyone tell you what is right for you; it has to fit with your goals and your risk tolerance. Spend the time to put together a financial plan, and you can choose your best investments with that plan in mind. - 23199
Stocks: Investing in stock will require you to be a little more active in managing your investments; the days of buy and hold are likely gone for good. Since the economy is still not back to top performance, you'll want to stay on top of your investments to ensure they continue to perform. Invest in the big name companies, those companies which perform in both good and bad markets. These are companies consumers continue to buy, their products are everyday necessities, and the management has maintained good revenues, low debt and adequate 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.
CDs and Money Market accounts: These investment vehicles are as close to savings accounts as you can probably get. They also have very low interest rates right now, even with large deposits you will likely find rates under 3% or 4%. Remember though that most CDs and money market accounts are insured (but not all - check with the bank you're buying from). With rates this low, you want to consider taking a little more risk, unless you are facing retirement, or paying for college in the next year or two. But again depending on your personal goals, keeping some portion of money parked in these safe investments might be a good idea.
There really isn't a best investment that works for everyone. Whatever you choose in your investment account should be based on your personal financial strategy. Don't let anyone tell you what is right for you; it has to fit with your goals and your risk tolerance. Spend the time to put together a financial plan, and you can choose your best investments with that plan in mind. - 23199
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 @ 2:45 AM
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