Economic downturns and wise investments- Here’s the story you were waiting for!

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Economy

The sheer mention of the word downturn can strike a chord of fear amidst investors. The economy is like a complete cycle and eventually, after it crosses its high points and standard growth zone, it will return to the profound decline. The world economy is clearly going through a tough phase at this moment due to the uncertainty posed because of the United Kingdom’s Brexit and also the ongoing trade wars between the United States and China. All of these do put up a warning sign for the investors in the days to come.

Presently, the UK isn’t the only country that is facing uncertainty. With four different outcomes of the Brexit, there are 4 forecasts of the GDP and the UK is just one of the countries that are in this fragile economic climate.

However, if you plan to invest amidst these choppy waters of the economy, here are a few points to keep in mind while developing your portfolio –

Understand recession

Recession is known as the period of time when the economy is in a stage of slowdown and downturn. With consecutive quarters of negative GDP, such recession does enter the economy. This is a result of the loss of confidence from customers and businesses alike when it comes to spending money. This is when incomes become stagnant, loss in sales and reduction in production takes place subsequently. You might well be thinking that how can anyone build a successful portfolio in such a situation. Recession is a part of the cyclic economy, which means it will surely grow sooner or later and hence smart long term investment portfolio is definitely the way to go.

Opportunities

With recession comes a massive drop in the prices of assets and commodities. While due to the same reason investors are forced to part ways with their assets, you can scoop in at this moment and buy assets at least 20%-30% minimum lesser than what it was valued a year back. This can be the perfect time for you to capture assets and hold for them until the time when the market returns a better percentage on your invested asset. Another major investment form you can choose is Gold. Right now the Gold valuation is soaring high at over a $1600 per ounce in the US stock market. It will offer you better stability and hence your money will be in safe if it is put into gold.

It is always possible to invest but all you need to do is make smart calls to head towards the right direction even if the recession is about to hit the market.