3 Investment Considerations In A Volatile Economy

It’s no secret that right now the economy is at a huge turning point. Some aren’t sure if the policies of the government and the central banks of countries around the world have been beneficial to the global economy as a whole or if the effects of mass liquidity and stimulation in the stock and real estate markets are just another artificial bubble.

The fortunate news is that at times like this, there are ways out of the problem with healthy investments in hedges and powerful down market investments. Some of these are simple and obvious investments to make while others might be a bit less known to the average investor. By perhaps reallocating your investment portfolio with more strength in these areas, you may realize a profit or less of a loss than you might normally have to deal with if you aren’t adequately diversified.

Here are some of the best things to buy in a difficult economy:

Gold and Silver Bullion

The effect that the market as a whole has on gold and silver prices is astounding. In general, investors see gold and silver as a hedge for their money long term when all other options look dangerous and tricky. For this reason, investors maybe wise to jump into these precious metals when investments such as the stock market or the dollar do not have such a rosy future.

The collective need to invest in these and other precious metals typically causes their cost to skyrocket during a down economy, which means you have the opportunity to profit. Many gold and financial experts are predicting that gold and silver have not reached their height just yet. If so, then they are still opportunity and at the worst their value will never be zero because of their stability. At least so says the commercials, right?

Reverse Index Funds

Everyone knows you can buy up the SPY or the QQQQ and own a share of the stock market as a whole, but not a lot of people realize just how powerful bear funds are as well, especially if troubling times are ahead. Bear funds offer the exact opposite of what normal index funds provide. They go up when the market as a whole goes down.

They do this by shorting a diversified basket of stocks and occasionally other investments such as oil futures or certain sectors of the market. Just make sure you hang on to them for a while and watch for the next market collapse as they tend to happen quite fast with opportunities for profit!

Foreign Currencies such as NZD, CHF or AUD

When it comes to a stable banking system that is independent of the debt and collateral damage of the global banks, Sweden and New Zealand are probably the most stable banks you can find. Because they loan and borrow very little and tend to have enough in their own banks to provide for their country, the risk on these currencies is relatively low.

The same applies to the Australian dollar. At the time of this writing most economic indicators show Australia is a very stable economy separated from the rest of the world with a huge supply of gold, they have been known to be quite stable even in periods of economic turmoil. Look for currencies like this during times of uncertainty.

Our goal with this post is to make you aware of the aforementioned items. Always remember that investment comes with risk. Perhaps, something mentioned in this post and others will be the catalyst to doing further research on your own with the help of an unbiased financial advisor.

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