How To Hedge When The Markets Are Down
It’s no surprise that everyone loves it when the markets are bullish. When they are, the investing climate is very favorable. Put your money wherever seems appropriate, reap what you earn, rinse and repeat. However, it can’t always go up. The old adage of “what must go up must come down” rings true when it comes to investing.
And when that happens, people all over the investing world feel the crunch. The good times stop and the companies that seemed so promising before, suddenly don´t look so good. Investors pull back their investments and start to look elsewhere—even though there´s nowhere else to look—and the markets slowly (or quickly) change and a small dip follows.
Keep in mind, all of what’s said works pretty much through dips and recessions when the market downturns. Sure, dips sometimes aren’t bad, and recessions tend to be a good thing in the long run as it flushes out the chaff from the wheat after a while, but for investors it can be a little bit hard. Many people, especially those that like high stakes, tend to play it more conservatively and just wait till the market starts to climb again.
So during these down times, what is an investor to do to continue earning beyond inflation rates and to continue to earn on their investments? Well, for starters there are a lot of ways that an investor can continue to earn.
First off, there are some markets that are almost recession proof. These markets typically include utilities, metals, and commodities. Silver, gold, oil, gas, electricity, and the like tend to make a lot of money even during a dip because these are things that are either finite in number, or are constantly used and thus never seem to really feel a downturn when a dip comes.
Another investment to hedge your investment is putting your money in bonds and CDs. While typically these don’t earn a massive return, they do end up outpacing inflation by a fair amount, with the added bonus of putting your money somewhere safe. A lot of investors tend to put them in ladders, where a third of their investment goes into a 6-month bond, a 1-year bond, a 3-year bond, and a 5-year bond and then use that money depending on how the market looks when they mature.
The third option is to find a market that’s on the rise. Right now, it looks like fintech companies are on the rise for the sheer fact that the development of new technologies can be applied to capital markets, banking, remittances, and anything that has to do with finances in general. This continuous innovation is what makes them enticing to invest in.
The fintech market is one of the most exciting as of lately. The kinds of breakthroughs that the big players have pulled through and some of the projects of emergent players are absolutely outstanding. Things like blockchain technology and its future integration with the banking and trading models are as significant as the dawn of internet back in the late 1990s.
With products that have a clear widespread need and applications with an expansive range, this is one of the most promising markets as of late. Therefore, the companies rising in this field are destined to perform the best and stay on the rise no matter what phase of the next economic cycle they’re in, making them a safe bet.
And among them, there’s one particular company that seems to be attracting a lot of attention because of their business model and services that they provide. This company happens to be a holding of a consortium of fintech companies with a forward-thinking vision that aims to redesign the financial landscape.
Fintech is the best performing sector, and these are companies that are leading the way forward – helping you stay recession-proof. Click the link below to learn more