With recent events including a government stimulus and volatility of the stock market tested more than ever, some economists are expecting a recession on the horizon. This could signal challenging times for many in addition to the uncertainty of the pandemic with the coronavirus. Naturally, in challenging times one wants to withdraw their investment and hold it in another account including a personal checking or savings account to prevent financial uncertainty. While not everyone has the opportunity to invest during financial difficulties, there are still reasons why you should consider investing as little as $1 in an array of options to ensure your money increases in value in the future. Listed below are some ways to invest your money during challenging times.
Buy stock in essential companies:
In economic turmoil, most companies tend to lay off employees or decrease their output of business to conserve their livelihood. You don’t see people typically purchase non-essential items including technology items or vacations at this time when those funds could be used for more valuable resources. Instead, consumers rely on low-cost stores to purchase their essentials: food, water, toiletries, and medications. Buying stock these companies that provide essential items not only is a good investment in the short run but once the economy has recovered, these stocks can slightly increase as well. Examples of good stock to purchase in this sector include Target, Walmart, CVS, and Costco.
Do not sell-off your stocks:
When a recession hits, people automatically see the prices of the stock market crash. Panic begins to set in, and people are frantically looking to sell-off their assets as soon as possible to avoid any future loss. Selling your stocks during a recession will hurt your investment portfolio in the future. Typically, recessions occur once every 5 years give or take. For investors that have held onto their stock during a crash, almost every time they have seen that investment increase.
Disclaimer: This article is meant strictly for informational purposes. Not intended as financial or investment advice. Do not misuse or misconstrue the information in this article. Seek advice from your personal financial advisor on matters pertaining to investments/finances.