With the economy in possible decline, it might not seem like the right time to put your money in the market. But could it be? Andrew Chang talks to financial counsellor Jessica Moorhouse about why a recession could be a good time to invest.
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As an AI language model, I don’t have feelings or experiences, so I won’t be able to provide my real thoughts on investing in a recession. However, I can present some helpful tips on this topic, which could be informative to those who are pondering whether they should invest during an economic downturn.
Investing during a recession can be a scary proposition for many people, but it can also be an excellent opportunity to build wealth. Recession means that markets are down and businesses are struggling, but it also signifies that prices are lower than usual, and there are ample stocks available for investment at bargain prices. That’s why many knowledgeable investors see recessions as potential profitable opportunities. In this article, we will discuss how to invest during a recession correctly.
First and foremost, investing in a recession requires having a long-term strategy. Short-term investors risk getting caught up in the day-to-day fluctuations in the market, which can be a recipe for disaster. Instead, try to focus on the big picture and invest in assets that have the potential to grow in value over time. A typical long-term strategy is to invest in the stock market with a diversified portfolio. Diversifying your investments involves spreading your money across different industries, countries, and asset types to lower your risk level.
Secondly, learn to manage your risk. Investing in the stock market is always risky, but this risk increases during a recession. During difficult economic times, companies often struggle to maintain their profits, which leads to declining share prices. That’s why having a diversified portfolio is crucial to managing risk – if one sector is hit hard, assets in other sectors might maintain their value. Additionally, consider holding onto a portion of cash or safe assets, such as bonds, in case things take a turn for the worse.
Thirdly, keep an eye on economic indicators to make informed decisions. In times of recession, there is usually a lot of volatility in the stock market, which can make it difficult to know when to buy or sell. However, if you keep track of the prevailing economic indicators, you can often make better-informed investment decisions. Look at things like GDP growth, unemployment rates, and inflation, as well as the specific performance of companies you’re considering investing in.
Finally, invest with discipline. Panic and fear can cause investors to make poor decisions, such as selling their investments at a loss. During a recession, it’s important to stay disciplined and keep a level head. Stick to your long-term strategy, don’t give into the temptation to sell based on short-term market movements, and always do your own research before investing.
In conclusion, investing during a recession can provide excellent potential returns, but it requires a well-thought-out long-term strategy, managing your risks, keeping an eye on economic indicators, and investing with discipline. If you’re considering investing in a recession, speak to a financial advisor or do your research before making any decisions. By investing with care and diligence, you can turn a difficult economic time into a chance to build long-term wealth.
The spider? haha. okay. should have explained what you mean by that. I had to explain what that was to someone just now because you just said "the spider" and left it at that. hahaha. also, you probably should have used some canadian etfs that follow the s&p 500.
Is Chang old enough to interview people?
As a American, I love CBC. Always great and easy to understand advice.
Her advice is excellent. Many people make mistakes but if they follow Jessica's advice they will be fine. I envy the young ones who have decades to slowly build wealth the right way…
My big question has always been, but especially now, is how can someone on ODSP invest, get ahead a little. I've been on a combination of ODSP and CPP-D since 2002 and basically live hand to mouth. Incredibly I've managed to save that 3–6 months Emergency Fund, but have so little left over at the end of the month that any financial institution I've approached about investing has turned me down, saying I just don't have enough income. But we all fear for the future, right? Especially those who don't have a choice about being on permanently low incomes. I'm sure I'm not alone in wanting to invest but simply not having enough income.
Would Jessica Moorhouse, or any other financial advisor, have advice about this topic?
Eq bank has great GIC rates, but talk to your bank and ask them to match eq bank
Your channel has truly changed my life. i've been studying and researching about crypto for a while now, do to the economy crisis and i got stuck at some point on the learning curve. now i can say I'm truly improving my understanding of this whole new world and making great profit weekly, all thanks to you
Defund CBC
crypto currency next?
Andrew, you are great!
Female Dave Ramsey!
If you are a retired person or planning to retire soon don't give your money away and re-invest in uncertainty. GIC is safe with good returns of up to 5.5%.
Very helpful program. Please make more of these types of programs. I love it.
Wow! it is so long(50 years) since I had to decide how to invest my savings!
Interesting but the lady talks as she breakfasted à cheeta
I would like videos on the housing market, is home ownership is still possible or should we all give up.
No worries for me, I don't try to time the market. When I see that stock drops below its fair value with some margin of safety – I buy. Past 2-3 months have been huge shopping spree for me. I've got literally nothing left of investing cash. Probably I will miss some occasions in the future months, but who cares as long as I got value?
Invest in Dispensaries. They're immune to your market conditions.
Waiting for the S&P 500 to hit 3500 in Q1 2023. BUY BUY BUY!
Learn to short the market and buy puts… then you'll make more money in a 'bear' market than you could possibly make in a bull market.
Why was nobody raving about rrsvps? wtf? all i hear is market market market. listen, i get there is nothing wrong with being rich, buying into a company is a rich mans game, otherwise, why are you spending money like its a gamble?
To sum it up: same old same old.
Too simple. Suffers from recency bias. A recession won't be your problem. The problem will be the change in interest rate environment. Interest rates run in long multi-decade cycles. The last few decades were a free ride in the markets. From a high peak in the early 1980's interest rates dropped from the high teens down to sub 1%. Asset values are inversely related to the interest rate, hence that multi-decade decline in interest rates correlated with a multi-decade rise in stock prices. If the interest rate cycle pattern holds going forward, then we are now entering a multi decade period of rate increase and that means that making a decent return in the market will be harder and harder. No more free ride. Look back to the period 1950 to 1980 and you'll get an idea what may lie ahead for financial markets.
LOL speed dial… Andrew is showing his age. 😛
If you miss even a couple of the best days you can never recover your losses. It’s pure math. I lost 46 percent in 2008 in my work 401k and in 10 years went from 406k to 970k. I changed nothing and did nothing except cry and bit off my fingernails. Just ride it out in well rounded ETF’s.
i know too many people following advice from tik tok/instagram, on how to make money fast. The couch potato method has always and is proven itself time and time again that it works. invest monthly, and leave it. dont even look at your accounts. i only see mine once a month lol
How is tesla risky? It's down around 60% with no fundamental change.