Kaoutar Nasser | Staff Writer
Whilst this recession and high rates of inflation may seem worrisome, others would perceive it as an opportunity for investment. For the first time in a long time, interest rates are increasing, causing the market to be extremely volatile. Now the dilemma is, should you jump on this investment train or wait for it to fade away?
The act of investing involves placing money into a variety of assets, including stocks, bonds, mutual funds, cryptocurrencies, NFTs, etc. There are numerous options for investing. Yet growing your money is always the focus. As a result, if you invest $10 and a stock rises to $15, you now have $15. The stock could be worth $25, $50, or even more by the time you turn 30.
Who is better off in the market at this time?
When it comes to investment, It matters how long you’ve been investing thus you have to stop waiting for the perfect moment to start. A recession could be a chance to profit if you pick the right investing strategy and quality assets during this period. Additionally, if you are not planning to touch your portfolio for a few years and you are a new investor looking for a long-term “buy and hold” strategy, this is one of the best times to enter the markets and begin investing. Regarding the recession itself, it’s important to understand that with a well-diversified portfolio and power of compounding, its volatility will smooth out as this was the case for many years in the stock market. So start researching for the right investment strategy for you and don’t miss out on any potential gains!
What to invest in and what resources do I have?
for a recession, it is important to know what you are investing in. Thus, research well the sectors that perform well during a recession such as ( Communication services, Consumer goods, Energy, Healthcare services, IT, Materials, Real estate , Utilities) then places that perform well during this period. For instance, dividend stocks of established companies with strong balance sheets and cash flows and diversify your portfolio around consumer staples since consumers will always need to buy food, drugs and hygiene and medical supplies. On the other hand, take advantage of the dollar-cost averaging strategy because shares will decline in price as you buy them. You can dollar cost average by investing new money or simply set your dividends to automatically reinvest, which would do the same thing.
That being said, these are not the only investment options you have but it could be a starting point for your research, and you always have alternatives any investment such as crowd investing, digital currencies that don’t require a lot of money as starter and no interference of the banks.
Investment is a big market, and it can be hard to get into it however the sooner you start learning about it, the sooner you can plan your financial future!