As we all know we are currently in recession. How bad it will be and how long it will last is the subject of much debate. At it will be no surprise to hear that this means there are less and less people making investments. However, just because there is a recession does not mean it is necessarily a bad time to invest. It all depends on your personal situation and how you invest. There certainly are advantages to investing in a recession.
When there is recession shares drop, and some become extremely low. But this can work out to the investor's advantage. Investing when shares are low obviously means that you are paying less for your shares. Therefore once they rise again, which hopefully one day they will, you stand to make a big profit. Of course this all depends on making the right decision. You don't want to invest in a business that is going to collapse. Investing in a recession is all about timing. Time it right and you could buy shares at their lowest, just before the go up again, and watch them rocket.
There are certain shares that will always rise, whether there is a recession or not. They may not rise as quickly as normal, but they will still rise. Of course knowing which shares these are is the tricky part. For example, the British supermarket, Tesco, has just announced record annual profits of £3.13 billion. That is not just a record for them, but for any British company. So anyone who had Tesco share, even in a recession, has benefited, and anyone who sold them because of the recession is probably regretting it. A recession gets rid of inadequate businesses. This means that the cream rises to the top. So investing in the right business is crucial. There are businesses that people need during a recession, and these are areas to look into if you are looking to invest.
Many new businesses are also started during a recession. Some people see an opportunity for something that will prosper in touch financial times. There are also many people who loose their jobs in a recession and then start their own business. Just because someone has been made redundant does not mean that they don't know what they are doing, and many new business that come out of a recession become very successful. Investing in a new business, where shares start off low, is another area that could be worth looking in to.
When investing it is always important to be careful. This is even more the case in a recession. It is a good idea not to take too bigger risk, and leave plenty of money aside. It is also important to seek advice when investing, especially if you are new to the game.
0 comments:
Post a Comment