2019 Recession is part of an overheated economy and is part of the business cycle. While investment value is declining, the most important thing is that market value will be accepted over time. An investor can come out of recession by making rational investment decisions. This article discusses the details of various actions that can benefit Smart investors While the Market is falling and worsening
1.Invest in a counter-cyclical stock before the recession. Companies such as these are engaged in defense, basic goods and utilities. These companies provide basic necessities so that their income is not too affected by the recession. Counter-cyclical stocks must have been a conservative part of the portfolio before the recession. Buying early or during a recession will hurt investors as the economy improves.
It should be remembered that as the economy improves, it should limit the dependence on these stocks. Counter-cyclical companies are less profitable for investors than cyclical and fast-growing companies. Even so, the investment of these companies is still worth maintaining and profitable in the long run.
2. Buy bonds from the government. This investment is not only very reliable and safe, but its value also increases during the recession. The most common type of government bonds are Government Securities, which have almost no risk. Some foreign bonds are also quite reliable during a recession.
3. Invest in precious metals. Precious metals, especially gold, are good investments during a recession. When the economy is stable, investors prefer investing speculation and gold prices will fall. But if there is a recession, the price of gold tends to rise so it is worth investing.
4. Consider buying danareksa or EFT. Danareksa and EFT are diversified portfolios that are specifically designed to grow in a variety of market conditions. Recession is a good time to buy danareksa because the value of shares decreases and danareksa will grow quickly when the recession ends.
Diversification is a risk management strategy in a large securities portfolio. Most investors cannot have broad diversification in their portfolio compared to danareksa or ETF.
5. Double your current portfolio. As long as you are still working and earning during a recession, consider investing more in a portfolio. Recovery will increase the value of assets quickly and get a lot of money, so multiply investment at this time.
If you buy an initial investment for the long term, the low share price is an opportunity to make a profit in the hope that the stock price will rise by the company's good performance.
6. Don't finance your investment with debt. Leveraged investment, or buying assets with borrowed money, is a risk-filled strategy in all markets. However, the risk of this practice will be even greater during a recession because the price of a company's invested shares can fall unexpectedly and even go bankrupt. In short, leverage can increase losses as much as potential increases profits and in the end you can lose everything you have due to wrong decisions.
7. Maximize contributions to 401 (k). Recessions also contribute to 401 (k) or retirement accounts or other retirement accounts that will buy more shares in investment than before. As a result, various contributions have the potential to grow dramatically during the recovery period.
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