5 Proven Investment Strategies You Can Use to Ride Out a Recession
There's no way for investors to avoid recessions. Economic cycles are natural, and they can move the market drastically. That doesn't have to be a bad thing, though! Investors can use a few important strategies to limit losses and maximize long-term gains.
This is the most important strategy on the list, by far. It's also probably the most simple one. The stock market is likely to drop during or immediately following a recession. Our human instinct is to take action to stop the pain. It's not easy to do, but the best move is generally to fight this instinct.
The worst time to sell a stock is right after it's dropped. All that does is lock in your losses. The best time to sell has already passed, and chasing that is an irrational fear reaction -- it's already too late. You might prevent further losses, but you could also lock yourself out of the gains from the inevitable market recovery. Some recoveries take years following prolonged, steep crashes. Other ones are immediate, but either way, it's nearly impossible to know which one you're dealing with in the moment.
Source Fool.com
