When it comes to staying afloat during a recession, especially one that is expected to be this far-reaching, individuals and institutions have to determine how to manage investments and keep portfolios healthy. Your own strategy should be developed by working with a professional, but a few classic approaches are:
Opting for investments that are backed by tangible assets, such as gold or real estate, is a popular way to hedge against recession fears. These assets often have an inverse relationship with the stock market, creating a bit of a safety net no matter what happens.
Stop trying to time the market; you will never win. Instead, invest in smaller increments at regular time intervals. This method targets small, incremental gains while also hedging against falling values. If the price of your investment goes up, you’ll see smaller gains, but if it goes down, your losses will not be as detrimental.
The best thing you can do for your portfolio -- no matter what the macroeconomic landscape looks like -- is diversify your portfolio. Putting all your eggs in one basket is sure to lead to disappointment, but with a healthy range of investments, you’ll likely see long-term gains. Talk to a financial advisor about what the best portfolio mix for your situation looks like.
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