Protecting Your Insurance: Investment Management In Down Times

Proper savings and investments management is critical to maximizing the returns on any sort of savings or retirement plan in any type of economy. However, times of major recessions or economic uncertainty, proper investment management strategies are not only prudent - they are essential. Therefore, here's a guide that will help you evaluate your current investment situation and develop a strategy to protect your investments at volatile or unsure times:

Step 1 - Evaluate Your Exposure

The first thing you'll need to do is to gather all of your savings, stock information and any other investment related information you may have available. Then, you should sit down and carefully evaluates the risks that are associated with each type of investment. For example, if you are heavily involved in volatile hedge funds or other types of funds that are dependent on good earnings or robust revenues of a wide range of companies, you might want to consider diversifying into some more classic types of conservative safe havens, such as: gold, certificates of deposits and treasury bills.

Furthermore, you always want to make sure that you are not putting any capital at risk that will be needed in the near future. It is especially important to follow this investment strategy in times when the broader economy is in turmoil or the economy’s direction is unknown.

Step 2 - Buy Low and Sell High

The most commonly used expression in the investment world -- buy low and sell high. It is always great advice if you can find good deals and later sell them for profit. If you are a little more adventurous in your investments, then recessions or economic downtimes can be a good time to actually buy more stocks.

If you purchase during the down times, you will able to purchase stock shares at lower prices, and you can almost be certain that prices in the market will eventually rebound. However, just because you purchase a particular stock at a relatively low price does not mean that it will not decline in value. Some companies simply can't adapt and regroup in a poor economy and sometimes will fail. But, if you're want to get some great deals and invest in relatively strong companies during a recession, then investing during hard economic types will usually yield better results than many other types of investments.

Step 3 - Always Have Cash

It is important to keep a fair amount of your holdings liquid -- especially during an economic downturn. Therefore, safe investment vehicles such as standard savings accounts and certificates of deposit should never be overlooked. While they do not offer the types of higher returns of other types of investments, they are almost always as safe as keeping cash under your bed - many times, a lot safer.

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