Resilient and Ready

How To Invest During a Recession

Economists surveyed by Bloomberg gave a 70% likelihood of a recession hitting the U.S. this year. That should be enough warning to us all.

This post will look at defensive investing for the stock market and weigh the potential for purchasing real estate during this time.

During bear markets, prices get suppressed by investors' negative expectations about companies' future earnings, which impacts their potential return from the stock.

Buckle Up

However, investors can protect their capital during a sustained market downturn like this by hedging into safer asset classes and stable income-generating stocks.

While low volatility creates a sense of security for investors, high volatility can spread fear, uncertainty, and doubt (“FUD”) in the market, causing even seasoned traders to make irrational decisions.

Volatility in The Market

Holding overly volatile stocks can create unnecessary psychological pressure during these periods. As a result, long-term investors may instead want to minimize their portfolio's vulnerability to volatility.

The U.S. is witnessing a serious price correction, with homes dipping 2.67% nationally in Q3 2022 – one of the sharpest drops since the 1940s. They fell again in Q4 2022.

Buy The Housing Dip?

The drop in valuations presents an opportunity, especially for first-time buyers who were priced out of the previously overheated market.

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