The economy can be hard on your portfolio. This has happened before and it could happen
again. Now that we’re officially in a
recession, what better time to pump up your resources and shore up your
portfolio than to make it recession-proof now or at least weather the tough
economic times? Here are some
anti-recession tips on personal
finance you might want to consider:
Aim for Quality
If there's one thing that markets abhor, it's
uncertainty. This is especially
prevalent in the way investors behave when faced with companies that produce
predictable figures. This is also the
reason why investors are loathed to take chances on companies that don't
perform as expected. These companies are
usually the small ones, ones that need investors" faith the most.
To start shoring up your portfolio, try to avoid companies
that will rely heavily on you, the investor.
It will be easier for you (and safer for your investment) to rely on
companies that more or less show predictable growth because this points to
better earning quality. Opt for these
companies instead – these are usually large firms, big players in an industry
that have proven staying power regardless of the economy and have plenty of
money to continue to run, do business, pay debtors, produce and make their
investors happy.
Invest in Health Care
Take your pick: drugs, medicines and pharmaceuticals or
health services. Whichever way you go,
you have a better means of shoring up your portfolio if you put your faith on
this sector that continues to enjoy a healthy performance.
And it shouldn't surprise you one bit: what the health care
industry can offer is a staple among consumers – good health and a means to
cure. Unless someone comes up with a
miracle cure soon, the health care industry will continue to thrive. Until then, this is one more segment of the
market that you might consider putting your faith on.
And yes... the fact that certain segments such as
pharmaceuticals pay a lot in terms of dividends doesn't hurt.
Stick Where the
Crowds Are
By crowds, we mean consumers. Consumers are the lifeblood of
economies. Without their support and
willingness to spend, economies can crash and burn so easily. As an investor looking to shore up your
portfolio, here's an anti-recession tip for you: invest where consumers bloom.
This means putting your money on industries that cater to
the most basic of consumer needs, such as food and beverages, personal care and
household needs. Other than the fact
that consumers have been proven to continue spending for basics even during a
bad economy, these industries have also performed well during less-than-ideal
economic times in the past. You"re
less likely to experience disappointment if you go where consumers go.
Diversify
Recession always brings out the worst – and best – in
people, especially investors. Which way
you wish to take is really up to you.
However, wouldn't it be better to view the recession as an opportunity
to find other means to make money?
If you want to shore up your portfolio and avoid the
negative effects of a recession, consider diversifying. But do so only by carefully considering the
pros and cons of the industries that you wish to invest in. Focus on industries that have behaved so well
under pressure, particularly those that continue to stay steady even during a
recession.
More on personal
finance can be found at http://www.ezmortgagecalculator.org/.
Other articles you may find interesting:
No comments:
Post a Comment