KOL Karen Analysis: This is How a Recession Can Make You Rich
Markets have been down as much as 36% over the past few months. While most people panic sell and moved to liquid cash, this is actually a good time to trade and invest in the markets.To get more news about forex signals
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I want to share with you some tips in which you can still pay your bills or even come out of this recession richer than before.
1. Invest into ETFs
The stock market index goes up in the long run no matter how bad the economy gets hit.
2008 recession. Markets dropped more than 50%, but if you held onto it in the long term, you would have made a handsome profit from it. Same scenario with the dot-com bubble.
So if it is so easy, why dont people invest into it？
Well because it is human nature to follow the crowd.
Majority of the dumb money are panic selling while the smart money would start to pick stocks up.If youre into commodities, you can also look into gold ETFs and oil ETFs. However, they tend to be more volatile in the long term as compared to the stocks index.
Gold mining companies and oil companies would pose an additional unsystematic risk, which you need to take note of.
But as long as the fundamentals & macro factors are in line with your investing criteria, then theres no harm looking into it.With that said, Im not providing the recommendation that investors should go all in now because nobody would be able to predict the market bottom.
So when it comes to index investing, you would want to implement the dollar cost averaging approach coupled with technical confirmation.
2. Start a Business
Did you know that Uber, Square & Whatsapp were started during the financial crisis？
Yes there are tons of people losing their jobs and also panicking.
Again, its the hard thing to do to not panic and instead choose to find solutions to problems.
I can only imagine that in the next market crash, businesses that were started during this market crash would become good stocks to buy during the next market crash.
Nowadays starting a business doesn‘t require a high capital expenditure because you’ve the internet.
3. Buy Undervalued & Good Quality Stocks
Now if starting a business sounds too daunting for you, then why not buy a business？
Also, if youre looking for higher returns as compared to the index and also if you have the skills to pick good stocks, then this is the way to go.
Majority of the stocks are down by more than 30%.
If you‘re looking for defensive stocks to minimize your risk exposure, then you might want to look into consumer staples. However, don’t expect the growth to be massive once the economy recovers.
In fact, companies like WMT wasn‘t that hard hit as compared to the secular stocks so you wouldn’t find that they will provide you a good discount during this outbreak.If your risk appetite can take it, then you might want to venture into the bank stocks and tech stocks such as AMZN, AAPL, INTC & MSFT.
INTC has been down more than 20% from a high of $69.29, with the target estimate to be $63.Based on the PEG ratio & PE ratio, it provides further confirmation that the stock is right now at a good price for investors to get into.
Also, fundamental growth numbers over the past few years indicate that the company still has a sustainable competitive advantage projected to continue growing in the next few years.If you need more details and analysis of the various asset classes, Ive done a free course in collaboration with WikiFX. You can check it out HERE.
With that, I wish you all the best and may the markets be with you.