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Best Investment if Worried About Economy?


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    If you think the economy may tank, what is the smartest investment decisions to make? Taking money out of the stock market makes sense but where do you put it? How do bonds compare to stocks when the economy takes a minor, average or major hit? And what do you do when interest rates are near zero? Money market accounts or other interest accounts will earn less than inflation. And also, if you don't want to gamble on hedges that will lose money if the economy or stock market goes up instead?

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    One thing that's confirmed is that not all parts of the economy are effected uniformly during recessions/depressions. Some stocks are doing great right now, and some are doing terrible. So you could aim to invest in segments of the economy that are either (seemingly) reasonably resilient no matter what happens, or buy/switch to stock in companies that are doing well right now.

    Also consider that many of these companies will bounce back, if you are willing to wait it out. You can also double-down on strong companies in a slump right now, and get more stock at a discount and play the long game.

    If that poses too much risk or hassle, bonds are much less risky. Not a bad idea to diversify more into them, or even switch to them completely until things start to look better. They yield smaller returns but can safeguard your savings if you fear losing money in a failing stock market.

    Also recommend this read -- 8 Fund Types to Use in a Recession

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    WyattTown Wrote:

    Also consider that many of these companies will bounce back, if you are willing to wait it out. You can also double-down on strong companies in a slump right now, and get more stock at a discount and play the long game.

    If that poses too much risk or hassle, bonds are much less risky. Not a bad idea to diversify more into them, or even switch to them completely until things start to look better. They yield smaller returns but can safeguard your savings if you fear losing money in a failing stock market.

    Agreed. I think this a good time to obtain more stock at a discount, and diversify your portfolio.