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How to invest during a recession? As a female investor, it’s already difficult to invest given that most of us make less than our male counterparts. Women only hold about 32 percent of all management and financial occupations, according to the Institute for Women’s Policy Research, which means we have less power when it comes to decisions surrounding investments.
The best way to invest during a recession is to have a diversified portfolio. This means investing in stocks, bonds, and other assets. You should also have an emergency fund to cover unexpected expenses.
The key to investing during a recession is to be smart and strategic about where you put your money.
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Here are a few tips:
1. Don’t put all your eggs in one basket.
Diversify your portfolio so that you’re not too exposed to any one particular sector or company. This will help minimize your risk if there is a downturn in the market. I personally follow Benjamin Graham’s principles of investing [1] and put in a considerable amount of research to find companies that are doing well even in tough economic times. There are always going to be companies that are immune to recessions or even do well during them. Look for companies in defensive industries like healthcare, food, and beverage, or consumer staples. I don’t try to time the market. Trying to time the market is a fool’s game. It’s impossible to predict when the market will bottom out. Overall, I decided to go for a split between cash, ETFs, bonds, and a small fraction in speculative assets (ie. blue chip art by www.masterworks.com or crypto) with a target asset allocation of 30/55/10/5.
2. Consider alternative investments.
There are a lot of different types of investments out there, and not all of them are stocks and mutual funds. Look into things like real estate, precious metals, and even collectibles. The company Female Invest offers free and paid masterclasses on how to invest and provides amazing insights for women investors.
3. Stay disciplined.
It can be tempting to panic and sell off all your investments when the market takes a plunge but resist the urge. Don’t make any rash decisions. Stick to your investing plan and ride out the storm. As women investors tend to be more risk averse, it’s easier to stay disciplined when the markets are down. As Forbes states, women are better investors as they generally outperform men over the long term because they trade less and are more patient [2].
4. Keep your expenses low.
Fees can eat into your returns. Look for low-cost investing options like index funds.
5. Have an emergency fund.
You never know when you might need some extra cash. An emergency fund is a must in any economic climate, but it’s especially important during a recession. This will help you cover unexpected expenses, like a job loss or a medical emergency, without having to sell off your investments. Make sure you have an emergency fund to cover unexpected expenses for at least 3 months.
6. Stay patient.
Investing is a long-term game. Don’t expect to see immediate results. Rome wasn’t built in a day and neither is a successful investment portfolio.
7. Stay informed.
Keep up with the news and current events so that you know what’s going on in the world of investing. Great news sources for female investors are
Was this helpful? How do you invest in uncertain times?
Sources: [1] https://www.amazon.co.uk/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661 [2] https://www.forbes.com/advisor/investing/woman-better-investors/
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