Great Investments During Stagnation (Economic Slow down)

When it comes to life and personal finance in general, you must see the positive side of every situation. The people that become wealthy during times of crisis are the people that seize opportunities when the economy is down, just as Warren Buffett wrote in the Times: “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful”

Economic crises happen from time to time, recessions and depressions occur. In the 20th century alone there were around twenty identifiable crises around the world – not including geopolitical events such as wars or terrorist attacks, which also caused markets to suddenly drop. Given the world's current volatile economic state of affairs, many people panic. They often behave irrationally, thereby further decreasing their investment portfolios. However, cool-headed shrewd investors see ongoing crises as opportunity and therefore are able to offset losses and make profits. Losses affect us more than gains, as a result, many people fail during financial turmoil. So, the questions is “Where should you put your money?”


Many specialists and experts have already answered that question, while there are things that they don’t agree on, there are which most of them-if not all- agree on such as:

Real Estate

Market plummets, however sooner or later optimism will return and prices bounce back to previous levels. Prices usually plunge amid turmoil and many companies with great fundamental capabilities fall, and investors, venture capitalists can make valuable purchases at low prices. Start looking at real estate as a long-term investment. There are always people that need to rent. If you buy a house without the intention of renting, it’s hard to go bad with real estate. It has a great long-term track record. Now is the time to buy, and you can scoop up
many steals right now.

Stock

Some industries that still do well in spite of any economic recession or stock market meltdown, and in many cases even perform very strongly because of that recession or meltdown. Some of these industries include healthcare, resource commodities, infrastructure, military equipment, utilities, and low-cost businesses. Dividend stocks in particular offer several advantages over their non-dividend-paying peers. Some of these advantages of dividend stocks: historically outperform non-dividend-paying stocks, they are often profitable, have time-tested business models and allow for dividends to be reinvested into more shares of dividend-paying stock compounding your wealth.

Treasury and Bonds

The bond market is a good way to safe guard your return on investment when the market is down. Typically, when the market is bad, the bond market interest rates go up. Note, that when you buy during times like this, you are buying at a seriously discounted price. You’re gains a month and a few years from now will be worth sticking it out. Honestly, you won’t get rich on the bond interest rates, but it’s a guaranteed interest rate that will wipe out some of your losses from the stock market.

In the end of the day, no one knows the future nor the ‘best absolute’ way to save your money, yet we do our best to get closer to it and to safety. Indeed, each way has its own pros and cons and its preferable conditions, regardless they are all safe mostly in all situation. Hence, it’s advisable to do your own research during these times.

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