Best Investments In A Down Economy
If you're nervous about the market, and have been sitting on the sidelines, here are some ideas for you to choose what could be the best investments for your portfolio. (Note: These are just ideas to consider and not recommendations; any investment decision you make should be based on your personal financial goals and risk tolerance.)
Stocks: When considering stocks, you may want to change your style from a "buy and hold" mentality. Those days are probably gone. The economy is still not on a completely solid footing, so when you buy, you will need to monitor whether your investments continue to meet your goals. Consider big brand name companies, the companies that continue to perform in good times and bad, because consumer are dedicated to purchasing their goods, or the products are necessities. Stick with companies that have a good balance sheet, with low debt and sufficient cash flow.
Bonds: Bonds may be more safe than stocks, but they have risks too. Returns are based on a company's ability to repay debt, so if a company goes bankrupt, the bondholders are negatively impacted. If you're thinking about Treasury bills or bonds, note that today yields are very low. Even if you have a measure of safety, you will get lower returns as a result. Check into tax free municipal bonds, government agency and utility bonds, and highly rated corporate bonds. Select bonds issued by strong, healthy companies, or stick with government agencies.
CDs and Money Market accounts: These investments are very much like savings accounts in that they are usually insured (check with the bank you invest with) and offer very low rates in exchange for safety. Because of these low rates, it may be best to invest here only if you are near retirement, or will be paying for college shortly, or are looking for a place to park money while you look for other investments.
Your selection of the best investment will be the one that is right for your. Put together a personal financial plan so you have a framework for choosing the right investments. By taking the time to plan, you'll have a foundation for choosing investments that will help you reach your goals. - 23210
Stocks: When considering stocks, you may want to change your style from a "buy and hold" mentality. Those days are probably gone. The economy is still not on a completely solid footing, so when you buy, you will need to monitor whether your investments continue to meet your goals. Consider big brand name companies, the companies that continue to perform in good times and bad, because consumer are dedicated to purchasing their goods, or the products are necessities. Stick with companies that have a good balance sheet, with low debt and sufficient cash flow.
Bonds: Bonds may be more safe than stocks, but they have risks too. Returns are based on a company's ability to repay debt, so if a company goes bankrupt, the bondholders are negatively impacted. If you're thinking about Treasury bills or bonds, note that today yields are very low. Even if you have a measure of safety, you will get lower returns as a result. Check into tax free municipal bonds, government agency and utility bonds, and highly rated corporate bonds. Select bonds issued by strong, healthy companies, or stick with government agencies.
CDs and Money Market accounts: These investments are very much like savings accounts in that they are usually insured (check with the bank you invest with) and offer very low rates in exchange for safety. Because of these low rates, it may be best to invest here only if you are near retirement, or will be paying for college shortly, or are looking for a place to park money while you look for other investments.
Your selection of the best investment will be the one that is right for your. Put together a personal financial plan so you have a framework for choosing the right investments. By taking the time to plan, you'll have a foundation for choosing investments that will help you reach your goals. - 23210
About the Author:
Looking for the best investment for your money right now? Sue Calhoun writes about contrary investing advice from not-the-usual sources.
posted by X - Men @ 3:14 AM
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