Protect Your Investment Against A Recession With These Four Steps
/When you turn on the news you are probably inundated with stories of doom. Various media outlets are suggesting that a recession is in the near future. The Coronavirus is sending the market into a tailspin and the upcoming election is causing major discomfort for folks. As an investor, how should you manage your portfolio during times of uncertainty? Here is my two cents on how to protect your investment during uneasy times.
Me with former presidential candidate, Marianne Williamson. I love her approach to economics and financial well-being.
1.Diversification
One major cornerstone of portfolio theory is diversification. Diversified investment refers to a viable portfolio of different assets that will often end up earning high returns for less risk.
Typically, a diversified investment has a unique blend of real estate, stocks, equities, bonds, mutual funds, and commodities. The strategy is effective because these assets respond differently to economic events.
2. Invest with consistency and intention
Dollar cost averaging is a strategy in which an investor places a fixed dollar amount into a given investment (usually common stock) on a regular basis. The investment generally takes place each and every month regardless of what is occurring in the financial markets. No one can time the market and responding to its every whim will wreak havoc on your financial portfolio. My suggestion is to invest with consistency and with intention. Once you determine your investment values and strategy, commit to it like a fitness regimen. While it is ok to make small adjustments here and there, your overall philosophy should remain the same.
3. Remain flexible
During times of uncertainty, most people become rigid and do not invest. If you have a higher risk level tolerance, this could be the perfect time to be flexible and explore different investment opportunities. If you aspire to take your investment game to a different level, you may want to consider equity crowdfunding, becoming an angel investor or investing in international markets.
Remember, any investment comes with some level of risk so be sure to always do your due diligence before any investment.
4. Insure Your Portfolio Against Loss
Investors across the world are beginning to worry more about the position and direction of the stock market. While no one has a crystal ball and no one can guarantee that your investment will have a desirable return, there are ways to protect aspects of your investment portfolio. If you own a home, consider taking co-op insurance. If you rent, I highly recommend getting renter’s insurance.
Prior to making any decision on investment, consider working with an expert who is genuine and will conduct an honest assessment of your financial situation.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Money & Mimosas is now enjoyed by readers in over fifty countries with the same dream of achieving financial freedom without living frugally.
