In contrast to the present economic growth and bullish market
trends, several experts are of the view that the US economy may come under the
grip of recession by the 4th quarter of 2013 or in the 1st
quarter of 2014. Investment expert Michael Lombardi published a report named Critical
Warning Number Six which attained much attention from the media because
of its controversial content that explains the possibility of an approaching economic
downturn which will be more severe than the one in 2007. Lombardi believes that
the present economic prosperity is the result of a 4 yearlong recovery
phenomena which initiated in 2009 after the devastation of the 2007-08 Great
Depression. At present, major investment sectors and stocks have recovered
completely and going through a phase of growth and expansion. But this phase of
affluence and economic growth will not continue forever and market will
collapse again in the future. Market downfalls, recovery, and growth are parts
of the economic cycle and by looking back at the past we can see that
recessions often arrives when the economy reaches the peak of growth and
development. Therefore recessional events will continue to haunt and torment
investors in the future as well which is why it is important to recession proof
investments and assets so that they are immune from future troubles. Given
below are some safety measures and rick management techniques adopting which
you can protect your wealth and investment from recessions.
Gold Investment:
Gold investment is one of the convenient procedures using which you can
safeguard property and assets from market downfall. Unlike money gold has real
value and its demand is always on the rise which is why you can convert your
monetary assets into gold by simply buying physical gold. There are 2
advantages of investing in gold,
first it acts as an inflation hedge which means the value of gold is not
effected by recession. Secondly since the value of gold is appreciative in
nature you can always buy gold at the present time and sell it at higher prices
in the future.
Diversify your
Portfolio: The best way to evade recessional dangers is by investing in
various sectors. Recessions often attack a particular sector in the beginning
and later spreads in to other segments. By diversifying your portfolio you will
get enough time to refuge and cover most of your assets before it causes major
damage to your wealth.
Investment in Foreign
Market: If you take a look at the last recession, you will see that
countries like China and India remained unaffected from the global economic
decline. Economies of countries like China are not tied to the US economy and
therefore investors looking to diversify their portfolio can invest in foreign
stocks in countries like India, Australia, Brazil, etc. Furthermore investors
can buy stocks from countries like China and India at lower prices and enjoy
high yields.
Real Estate Property
Investment: Real estate invest can be an effective tool during recession if
executed in the right manner. The wisest thing to do with real estate
properties during a recessional phase is to provide them on rent. You can be
successful in real estates if you sell the property during economic prosperity
and rent it during market downfall. In United States rental properties that
provide smooth cash flow is available in a number of areas and you can locate
them by doing some online study.
Invest in Timberland:
Timber is an investment sector that performs well when stock market declines as
the sector is not associated with the market. Moreover timber industry has
shown significant growth in the past 2 decades with continuous annual average
growth of log prices. The other benefit of timberland investment is that the
land you buy for growing timber acts as the principal and you can use it for
some other purpose if the timber market declines in the future.
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