Tips to make money in a recession Tips to make money in a recession

Tips to make money in a recession

Unfortunately, every economic downturn usually come with losses. Nevertheless, we have some special tips to face a recession and learn how to make money during difficult times.

Although recessions heavily affect industries, you can learn how to manage to even make money during difficult times. You just need to prepare yourself and play your cards right.

We've suffered other recessions in the past, so the best way to surf through economic downturns is to observe what happened in previous experiences. Bull and bear markets have their own cycles, so you can learn from them.

Making money during a recession may hard but not impossible! Below we present some tips that may come handy when you need them the most.

1. Observe the cycles

If you pay attention to the bull and bear cycles, then you can be prepared for future downturns.

So, the first thing to take into account is that bull markets usually last about eight years, while bear markets last less than two years.

Regarding gains and losses, in the bull markets, the average gain is of 400 points in the S&Ps 500 stock index, while the average loss during a bear market is 40%.

Now you know how the markets statistically work, you can observe the patterns and remain aware of possible downturns.

2. Time to make a move in the markets

You can learn to identify when to make a financial move by weighing the guaranteed return against the risk of money loss. Sometimes it is better to be more conservative regarding gains and face correctly a downturn.

If you have real estate investments, then you'll have to consider if it's worth maintaining a mortgage, property taxes, and expenses if prices remain stagnant or even drop.

In the end, it will depend if it's the house of your dreams or a rental property that only grants inconsistency in your economy.

3. Turn to gold

Although gold is a hard asset, it's also a safe spot during economic downturns.  This commodity may not generate dividends or earnings, but it will remain an investment during difficult times.

Bear in mind that, if you go for the gold, then you should learn thoroughly how global supply and demand dynamics work.

4. Always invest in yourself

Learn what skills you will need to survive in an eventual crisis and prepare yourself!

If you invest in improving those skills, you will be ready to face any economic downturn. Identify the strengths and weaknesses of your company and your team, invest in programs that can boost your skills.

It may seem unnecessary during the good times, but you will definitely cherish your decision during the bad times.

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