There has been a lot of news lately that we may be headed
for a recession. While this may or may not be, it is true
that certain types of investments are more prone to take
heavy losses if a recession could occur. You should take a
look at your investment portfolio and see how it might do
if we do enter one. A little preparation could be a lot
better than hindsight. Here are some tips for you to help
you weather the possible storm a little better.
Diversify Your Investments
One of the best strategies to help you get prepared for a
recession is to diversify your portfolio. This means divide
it up into several groups and place that percentage into
different kinds of investments. This means that not all of
it should go into stock, but some should also go into
bonds, mutual funds, and other investments.
You also want to stay away from putting it all into the
same type of investment. In other words, do not put all
your money into telecommunications, or real estate, or
metals, and similar things.
Keep Your Assets As Liquid As Possible
Another safety in the world of investing is to be able to
buy or sell easily. If your money gets tied to a market, it
is possible that you may either lose it altogether, or it
could become unusable for a long time. An example of this,
as many have already learned, would be real estate. People
have their investment (equity) tied up in some property
they cannot sell. Although no one could have really
foreseen this happening, yet it has. Some real estate
properties still sell easily - repeatedly, and other
properties do not. You do not want all of your assets tied
to one or two things where you may not be able to sell it
and get access to your cash.
By diversifying into at least 5 or 6 different markets, at
least half of your investment should remain easily
liquefiable. This should help you maintain value.
Watch Trend Markets
Some markets simply follow trends because a company may be
investing in something that is hot now. Generally, this
only has short-term value. While profit can be gained in
the short term, unless that company comes up with hot items
continually, they cannot maintain that status.
On the other hand, markets like metals or industries that
society depends on over the long haul, these will be more
stable markets in the long run - even in recessions.
Watch for the Long Term
During more difficult economic times, it becomes necessary
to allow your investments to take some dives. You should
expect this. In times of recession, this can occur across
the board and there may not be much that you can do about
it. Instead of moving your stock from one place to another,
however, look for long-term trends that will often
straighten themselves out and, hopefully, turn for the
better.
During recessions it is also possible to get some terrific
deals. Stock values may fall, but if you believe that a
particular product will still be around after the
recession, then you may very well want to go bargain
hunting if a recession comes.
----------------------------------------------------
Learn the investment strategies used by many wealthy people
to ensure their own futures, visit our website and request
your free DVD of a 3 hour seminars with Self Made
Millionaire Jamie McIntyre, visit
http://www.stockmarketaustralia.com.au
No comments:
Post a Comment