Where should you put your money in times of financial turmoil?

Where should you put your money in times of financial turmoil?

The recent news of the financial turmoil on Wall Street is disturbing. For younger people like me, it’s even more unsettling, because my generation has never been old enough to remember financial troubles like this in the past. Older people know that we have recovered from situations as bad or worse than this. One thing to remember is that this is what happens in a free market. The market corrects itself by eliminating companies that took too much risk. That is why I do not agree with all the interventions and bailouts of the government on a philosophical level. On a practical level, I agree that it had to be done, or the future of our financial sector would have been very bleak. What’s more, we must realize that the government is not just bailing out these big corporations to help a bunch of wealthy executives. They are thinking about the consequences for the average customer of a company like AIG. It is a difficult situation, but there is always a light at the end of the tunnel.

When it comes to life and personal finances in general, you need to see the bright side of every situation. It’s the healthy thing to do. The people who get rich in times of crisis are the people who seize opportunities when the economy is depressed. So the question is, “Where should you put your money?” Should you hide it under the mattress? Should you dig her a grave and forget about her for 10 years? The answer is simply no. Here are three steps you need to take to secure your money during a financial crisis.

Make minor changes to your investment style

Keep doing what you do best with your investments. If you let it sit under your mattress, it will rot much longer and at a more devastating rate than a couple of financial market mishaps will. When you shop at times like this, you are buying at a deeply discounted price. You are winning in a few months and in a few years it will be worth holding out.

Start looking at real estate as a long-term investment

There are always people who need to rent. If you buy a house without the intention of immediately changing it, it is difficult for it to go wrong with real estate. It has a great long-term track record. Now is the time to buy, and you can get a lot of thefts right now. There are many banks and private owners willing to dispose of properties for 30% to 40% less than the appraised value.

Invest part of your money in treasury and municipal bonds

Don’t put 50% of your money in the bond market, but the bond market is a great way to protect your return on investment when the market is down. Normally, when the market is bad, interest rates in the bond market go up. Municipal bonds are completely tax free. You won’t get rich off bond interest rates, but it is a guaranteed interest rate that will eliminate some of your stock market losses.

Conclusion

We must think independently and do our own research during these times. We cannot rely on the mainstream media to provide us with all our information on the economy. They will preach pessimism and doom all day long because that’s what drives audience ratings. It is amazing how the “good news” is considered boring to our culture. Whenever I hear good news in my life, my heart skips a beat. But in the news world, bad news makes their hearts skip a beat. Don’t get too frustrated with your IRA and 401k accounts. Just know that the more you invest in those accounts, the more shares you will be buying at a discounted price. Look for the light at the end of each tunnel and you will be sure to find it.

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