5 options for investing in a recession
June 20, 2022 10:00 a.m. EDT
NEW YORK, June 20, 2022 (Newswire.com) –
When the economy slows, it can be difficult for investors to know exactly how to react. Whether the stock market continues to trade sideways or slips even deeper into the red in anticipation of an impending recession, it is important to control emotions and determine a strategy to navigate the uncertain landscape. Fortunately, recessions have happened frequently throughout history, and for those who have resisted being fascinated by the markets’ sense of fear, recessions have often been exploited as rare and unexpected opportunities. Moreover, with the increase availability of alternative online investment platforms As yield streetand investors have no shortage of educational resources, there are plenty of reasons to believe that now may be the perfect time to invest.
That being said, here are five options to consider when investing during a recession or falling market:
Buy basic stocks at a discount – Even when the overall stock market is down, there will always be companies that have sustainable business models, reliable revenue streams, and a strong possibility of recovering their previous value or reaching new highs when market sentiment turns. return to. Knowing this, many investors view a recession as an opportunity to stock up on these “basic” stocks at a discount, and this strategy often pays off well for those willing to play for the long haul.
Dividend ETFs – Many stocks pay regular dividends to shareholders. Regardless of the economic backdrop, there are certain exchange-traded funds (ETFs) investors can buy into that provide access to several companies known to pay higher dividends. When markets are down, the passive returns generated by dividend payouts can seem much nicer.
Investing in real estate – When mortgage rates are high and house prices generally explode, it may seem counterintuitive invest in real estate. However, smart real estate investing is about more than just buying properties outright, and there are plenty of alternative methods to explore. Consider passive strategies like real estate investment trusts (REITS)or buy shares in rental properties on platforms like Arrived Homes.
Hold money – Believe it or not, simply holding onto cash can be considered an investment, especially when the markets are down and show no signs of rebounding in the near future. By focusing on steady streams of income and accumulating cash, you will have more capital to reinvest in the market when sentiment turns bullish, maximizing returns.
Investing in Crypto and Alternative Assets – Although volatile in nature and therefore more risky, cryptocurrencies are known to produce returns that significantly exceed traditional markets. Additionally, crypto ETFs allow those with less experience to buy into a diversified, professionally managed portfolio, such as Yieldstreet’s Enhanced Crypto Fund. Additionally, you might consider investing in other alternative asset classes that have little or no correlation to the stock market, such as fine art, art secured loansor even collectibles.