For several months now, economic experts have been warning about a potential recession. As fears and interest rates rise, investors are considering how to protect their assets and portfolios. Even Amazon Founder and Executive Chairman Jeff Bezos is weighing in with advice.
“Things are slowing down. You’re seeing layoffs in many, many sectors of the economy,” Bezos recently said in a CNN interview. “If you’re an individual considering purchasing a big-screen TV, you might want to wait, hold onto your money, and see what transpires. The same is true with a new automobile, refrigerator, or whatever else. Just remove some risk from the equation.”
Bezos’ advice is likely sound about avoiding high-ticket consumer goods purchases right now if possible, but all investments are not created equal. Many experts are advising that investors consider “recession-proof” assets to anchor their portfolios and capitalize on the upswing when the economy recovers. Here are 3 smart investments to consider in an unstable market:
- Real Estate – According to Smartasset, when a recession hits and home values drop, it may be a buying opportunity for investment properties. If you can rent out a property to a reliable tenant, you’ll have a steady stream of income while you ride out the recession. Once real estate values start to rise again, you can sell at a profit. If you are curious about investment properties in the Denver real estate market, MODE Real Estate can help you find that ideal property to fit your investment goals.
- Consumer Essential Stocks – Defensive and consumer essential stocks can further insulate your portfolio in rough markets (com). Look to industries that people rely on regardless of economic ups and downs such as consumer staples (groceries, household goods, etc.), utilities, healthcare, insurance, and “sin stocks” like alcohol and tobacco. While consumers may not see high yields from these assets, they are steady performers in virtually any economic conditions.
- Yourself – If an economic downturn results in the loss of a job or a notable decrease in hours, it is always smart to invest in yourself. Gain new knowledge and expertise through online courses. Use the newfound extra time to obtain that valuable industry credential, license, or accreditation. Or, explore an entirely new career field or gain new skills like coding, photography, or graphic design that have widespread application regardless of industry. Investing in yourself can also mean paying down debts, especially with higher interest rates on the horizon. Lowering your debt-to-income ratio is always a good idea, so set yourself up for greater recession resiliency by decreasing your debt.
Have questions about investing in Denver-area real estate? Get in touch with MODE Real Estate – we are here to help!