Everybody from car salesman to shopping malls is offering discounts. Also we are seeing salary and job cuts even if you’re securely employed, your next increment may not be as good as last year’s. “But bad news is an investors best friend’, said Warren Buffet, the world’s famous investor in a New York Times article in October. Though no one can tell the span of recession, but many of them have the view that it will run through 2009.To decrease its impact governments across the world are taking steps rate cuts, bailouts etc.
As individuals, you can make use of this recession as an investment opportunity by controlling your own expenses, save and invest your savings, either in fixed income investments or in equity shares.
Fixed income assets:-Bank’s have hiked rates on FD’s from 7% to 11%.If you take long term deposits[3 to 5 years], you can get same returns after recession even if the interest rate go down again. The safest place for FD’s, state owned banks, post office banks run by top financial institutions with a long and profitable record.
Income funds:- These are mutual funds that invest in medium to long term fixed income securities like government bonds and debentures. As interest rates come down the value of the bonds and other papers that back these funds shoots up, thereby yielding good returns for the investors.
Shares:-This is where you can benefit the most. Now it is the time to make selective purchases. Many of the best stocks are now available at unimaginable prices and your returns are goingto be high over time.
Diversity:-.Invest your tax –free profits [there is no tax if you sell shares or equity mutual funds after a year of purchase] in bonds, Post-office Deposits, or bank FD’s. this way your asset will be rebalanced and your capital much better protected against another recession and yet another future stock market crash.
