A Recession Survival Guide to Saving and Investing
Recession survival depends on having a smart saving and investing plan. With banks failing and stock markets on a rollercoaster, Americans are scared and confused about their finances. This article will answer the basic questions you have about protecting your finances in an economic downturn.
Q:So many banks are failing. Should I just take my money out and keep it at home?
A:Savings accounts and Certificates of Deposit(CDs) are insured by the FDIC up to a value of $250,000. Money Market checking accounts are not covered by FDIC. Credit Union deposits are covered by a similar agency called NCUA. Storing a little cash in a fireproof safe for emergencies such as natural disasters might not be a bad idea. Keeping large amounts of cash in your home is a security risk, however. If you are robbed your insurance policy probably won’t cover the loss. It’s still better to keep your emergency fund in your bank or credit union account.
Q:The volatility of the stock market scares me. should I sell all my stock now?
A:The stock market is for long term investing. If you need the money within 5 years it shouldn’t be in the stock market. Your emergency fund and money for short term savings goals like a down payment on a home should be in FDIC or NCUA insured products. Money for retirement should be in a 401K or IRA account. Within those funds you can choose from many types of investments such as stocks,bonds and CDs. Some experts say this is the best time ever to buy stocks because prices are so low. In the end only you can decide how much risk you’re willing to take with your investments.
Q:I keep hearing that I should buy gold and silver. Is that a good idea?
A:It’s true that gold and silver will never be worthless. When currency values are low precious metals tend to go up in value. Since gold and silver prices are at all time highs it probably would have been better to have bought it a few years ago when prices were lower. It may be a good idea to have some gold and silver in your portfolio. It could also be a good time to sell some of the gold you bought at a lower price. Consult a financial advisor about buying and selling assets.
Saving and investing in a recession doesn’t have to be complicated. By staying informed about your money you’ll stay a step ahead of those who don’t have a plan.
For more information about how you can make smart decisions about saving and investing in a tough economy go to The Recession Survival Guide or Recession Survival Guide-Saving and Investing.