Image Source: Austrian Startup
By Suhaib Mohammed
During a period of economic decline when stock markets drop, unemployment rises and purchasing power plunges, the big question is where should you put your money?
The risk of failure is high and the uncertainties are many. You’re scared of becoming the next victim of an economic decline however, there is a way forward. Here are three investment options you should consider:
Counter-Cyclical Stocks
One of best investment options during a recession is in counter-cyclical stocks. With these stocks, the underlying company belongs to an industry or niche with financial performance that is negatively correlated to the overall state of the economy. As a result, the stock’s price will also tend to move in a direction that is opposite to the general economic trend; meaning appreciation occurs during times of recession and depreciation in value occurs in times of economic expansion.
Government Bonds
Government bonds are one of the safest investment options in a tough economic downturn. With this investment option, you can earn returns on your fixed income, while saving up money for the rainy days. Government bonds can be purchased through major financial institutions.
Small-Scale Ventures
Starting up a side-hustle may help you keep your head above water during a recession. Think deeply about what you are passionate about, how you can add value, and consider starting a business that can earn you some extra cash. During recessions, opportunities usually present themselves as consumers substitute products and services for cheaper alternatives.
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