Best Investments In A Down Economy
Still feeling nervous about the stock market? Have you remained on the sidelines, trying to figure out what’s the best investment to be in right now? Here are ways you can choose the best investments appropriate for your personal portfolio. (The ideas listed below are to help you consider alternatives – but are not recommendations. Make your investing decisions based on your financial goals and risk tolerance.)
Stocks: When considering stocks, you may want to change your style from a “buy and hold” mentality. Those days are probably gone. The economy is still not on a completely solid footing, so when you buy, you will need to monitor whether your investments continue to meet your goals. Consider big brand name companies, the companies that continue to perform in good times and bad, because consumer are dedicated to purchasing their goods, or the products are necessities. Stick with companies that have a good balance sheet, with low debt and sufficient cash flow.
Bonds: Bonds may be more safe than stocks, but they have risks too. Returns are based on a company’s ability to repay debt, so if a company goes bankrupt, the bondholders are negatively impacted. If you’re thinking about Treasury bills or bonds, note that today yields are very low. Even if you have a measure of safety, you will get lower returns as a result. Check into tax free municipal bonds, government agency and utility bonds, and highly rated corporate bonds. Select bonds issued by strong, healthy companies, or stick with government agencies.
CDs and Money Market accounts: These investments are very much like savings accounts in that they are usually insured (check with the bank you invest with) and offer very low rates in exchange for safety. Because of these low rates, it may be best to invest here only if you are near retirement, or will be paying for college shortly, or are looking for a place to park money while you look for other investments.
Any investment should be based on your own, personal investment strategy. No financial planner, friend, blog or anyone else can tell you what the best investment is for you. Take the time to determine what your long term strategy is first, and your best investment choices will be those that help you reach those goals.






































