Everyone tells you how to survive a recession, but not how to thrive in one. Now, a recession can be a scary time, but it doesn't have to be. In fact, many of us are looking for ways to make extra money and find an alternative way to spend our free time. However, it's not about finding a way to make more money, but rather finding ways to save what you have. So, here are 3 ways to still make money during a recession.
In a recession, a common tendency can be to make changes to your retirement strategy, which may end up hurting you in the long run. Do NOT stop making your automated contributions to your retirement accounts, 401(k)s, IRA’s 403(b)s etc. Research and consider dollar cost averaging. This is the idea of staying consistent with contributions, while buying shares at higher prices when the market is strong and lower prices during a recession.
Check out a link to an in-depth definition of dollar-cost averaging:
One of the most important things to do is to avoid panicking and make sure your investment strategy remains the same regardless of what is happening in the market. If you are going to hold an account for 5yrs+, making these short-term changes can actually negatively impact your future performance. Make sure to keep your commitment to your investment strategy so that you can take part in the recovery.
Watch our most recent economy update below while we prepare for our June edition next week:
Don’t let the market dictate your risk tolerance. Stay the course and keep your target in line regardless of what is happening with the market. If you're looking to make money in a recession, look into investing in low-cost index funds. With stocks at their lowest point in 20 years, this is a suitable time to get into the market—but only if you have the discipline not to panic and sell when they rise again. If you want a straightforward way to invest regularly but don't want to be locked into a certain contribution amount each month, consider automatic contributions.
If you have any more questions, don't hesitate to reach out to me here!
Registered Representative of, Securities and investment advisory services offered through Hornor, Townsend & Kent, LLC. Registered Investment Adviser. Member FINRA/SIPC. 600 Dresher Road, Horsham PA 19044. 800-873-7637, www.htk.com. HTK is a wholly-owned subsidiary of The Penn Mutual Life Insurance Company. HTK does not offer tax or legal advice. Caserta & de Jongh, LLC is unaffiliated with HTK. For Educational Purposes Only - Not to be relied upon as financial advice. Not all topics discussed may be suitable for all investors.