Many countries are way past their boom period and a recession is long overdue, so keeping that in mind here are few tips that will help you survive an economic recession.
- Pay Up Mortgages
Always keep your liabilities to the minimum. During recession the demand and supply of goods and services will change drastically. Massive layoff, change in salary packages will hit hard almost everyone. So it is better to clear your debt before a recession.
- Move Your Investments
Move your investment out of the country before the market go belly up. Remember market is like a seesaw if one side goes down the other side will rise, so always look for safer opportunities and if you can’t its safer if you remove the funds all together. Use stop loss if you are unsure about the crash.
- Avoid Market Timing
If you are going for market timing I’ll strongly advise not to because it will be uncharted waters with the market changing every hour. During recession you won’t get the same information as the top hedge funds and other top tier people so better if you avoid going for market timing.
- Buy Gold
It’s a known fact that gold and stocks are negatively correlated. As market starts to feel the pressure more investors will opt for gold as its safer and holds value as a tradable good. If not gold other precious metals too will be a good bet.
- Keep Yourself Updated
Government is the biggest consumer in the market and will always step in to save the day and there will be a ton of new policies reforms. Now these policies will be aimed to get the market back up on its feet and there is a lot of room to make profit if you are right on time. So always keep a tab on the government policies.
- Foreign Currency
Depending on which country you are there will always be a safer currency which won’t be that effected so depending on where you are try to get your money onto other foreign currency where there is minimum risk.
- Minimize Spending/Manage Budget
This is a no brainer but still minimize your spending since you won’t know how long the recession will continue and since the society will be in a turmoil it’s better not to bring unwanted attention on you as people will do anything to survive.
- Investing In Essentials
Even if market is down people will still consume commodities to survive. So investing in essentials will be good idea as it will give you good returns even in recession.
- Startups
It is said from the ashes new life is born and this quote can be used in economics. New economic is always a breeding ground for startups with favorable policies so keep an out to invest.
Hope for the best and prepare for the worst. Since everything comes to an end even recession will have its end. Don’t lose hope and dream and work for a better future.
The Wannabe Economist 