That said, if you have cash to invest, you may want to consider buying recession-friendly sectors such as consumer staples, utilities and health care. Stocks that have been paying a dividend for many years are also a good choice, since they tend to be long established companies that can withstand a downturn.
Refinance Your Mortgage
“In fact, it's been shown that paying off a high interest rate has one of the best returns on your investment, meaning that finding ways to pay off debt or lower interest is one of the best ways to build wealth, especially during a recession,” says McHugh.
When the market starts to plunge, it is time to take advantage by increasing your contributions or starting dollar-cost-averaging in a non-qualified investment account. The best way to own dividend stocks is through mutual funds or exchange traded funds (ETFs) that invest strictly in dividend-paying companies.
There is no hard and fast rule about what will happen to the value of a currency during a deep recession – though, a currency is likely to fall because country becomes a less attractive place to invest. ... But the Euro and Dollar were less affected by the great recession.
The Federal Deposit Insurance Corp. (FDIC), an independent federal agency, protects you against financial loss if an FDIC-insured bank or savings association fails. Typically, the protection goes up to $250,000 per depositor and per account at a federally insured bank or savings association.
Investors typically flock to fixed-income investments (such as bonds) or dividend-yielding investments (such as dividend stocks) during recessions because they offer routine cash payments.
In a recession there's no reduction of overall wealth, just less or no growth. This is harmful because new money isn't circulating, typically it goes towards investment.
These five steps can help to keep your financial plan on track during uncertain economic times.
7 Ways to Recession-Proof Your Life
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