The global pandemic of the new coronavirus as already created a panic within the market. Millions of people have become jobless, and we are almost on the verge of another recession. With every economic crisis, the value of money depreciates faster than one can ever imagine. Does that mean your money is not safe anymore? The idea behind this article is to make you aware of such situations and how you can save your money.
1) Continuing Your SIP
One of the biggest mistakes that an equity investor makes is discontinuing their SIPs. There is nothing to worry about just because your total investment is running at a negative curve. Taking out your money in a situation like this is only going to burn a hole in your pocket. Instead of which you can opt for a lump sum. Recessions provide investors with the opportunity to acquire more profits. Afterall your SIPs were meant to run for a longer duration of time.
2) Investing in Properties
Just after recessions, housing finance companies try to cut down their losses by running huge discounts. Looking at the investment perspective, it is the best time than ever to buy properties. Whether you can use the property as a residential one, or hold them for a year or two. When the market recovers and gains its momentum, then you can look forward to selling the property. Understand this; real estate is something where you need to have patience and look for the right opportunity.
3) Stay Away from Volatile Stocks
Everyone loves quick and easy cash. But with higher profitability, the risks are higher two. As the market tries to pick up its pace, you might come across news of XYZ stock giving a 50% return overnight. But, this, in turn, signifies high volatility. Several times the risk-reward ratios are even higher than 1: 1. So, if you want to keep your money safe, stay away from these quick schemes. Look for the sectors that can genuinely provide growth and invest in them.
4) Keep Your Emergency Fund Ready
With job opportunities vanishing now and then, it is essential to be prepared for the unforeseeable future. That is why you need to make an emergency fund as soon as possible. At least your funding should include six months of your expenses. Indeed, your banks will be providing the lowest interest rates. But you need to understand that in these kinds of situations, banks are by far one of the safest places to keep your money. If you are a business owner, you should keep one year’s worth of investments.
5) Cutting Down Your Expenses
As the world proverb goes by, one penny saved is a penny earned. After the recession, you can come across several clearance sales. No matter how intimidating they might seem, it is essential to spend your money wisely. This is certainly not the best time to look for luxury items that you are getting at a dead cheap price.
It is imperative to understand that, under these circumstances, one small mistake can lead to a more significant loss. Post-recessions are the best time than ever to invest valuable assets. With the prices running at their all-time low, you can gain some profit down the line.