The Massive Recession - How To Invest In An Economic Downturn // 10X Academy

In this video "The Massive Recession - How To Invest In An Economic Downturn // 10X Academy", I discuss some key ways to invest during this economic uncertainty, and how you can prepare yourself to navigate the recession by making savvy investments to grow wealth over time.

With many people now entering retirement, and many depending on their 401Ks or pensions to live off of, there are a few key factors to consider, given the current economic environment that we are currently in. Firstly, for those depending on pensions, many companies that offered pensions are highly dependent on the stock and credit markets. The credit markets are where companies borrow money by issuing bonds. And the pensions buy them, because they get a yield on them.

The problem arises when there is an economic down turn, and business cycles start going down. This sets off a domino effect, which not only affects the stock market, but the credit market as well (which pensions rely on). The matter of fact is, during the last few years, the stock market has been propped basically by companies buying back their own shares, to increase the price per share of their stocks. The less shares that are available to trade on the open market, the more valued their shares become.

The propping of these markets by printing more money, is a dangerous scenario that will eventually cause inflation and a deep recession, until things normalize again, which could take years.

So what are good investments during these troubled times?
Well, to de-risk ones portfolio, we must consider assets that have not only the probability of maintaining their value, but also growing in value over any recessionary period.

1 - Gold

The easiest way to put your money in gold is to buy physical gold, such as coins, bullion or even jewelry. There’s always a risk in buying gold, as the price of gold tends to be very volatile, and there is a high risk of losing value in your investment over the short term. To make a profit off of gold, you need to have a reasonable expectation that there can be expected volatility, and that over time the price of gold will go higher.

If you look at physical gold at least as a store of value, buying at the right time can allow your asset to hold its value, and perhaps slowly appreciate over time. Versus traditional money and currency that will most definitely depreciate over time due to inflation.

2 - Crypto (Bitcoin)

I will not go into what Bitcoin is, or how to invest in. As there are many videos on youtube on the subject. But I will discuss the pros and cons of investing in Bitcoin. Investing in Bitcoin takes on asymmetric risk, where it is a high risk/high reward type of investment. But the reward risk fairly outweighs the risk of devaluation. Can the value of Bitcoin go to zero? It is highly unlikely at this point, as it has been able to survive despite all the negative media and significant drops over periods of time.

But what investors in Bitcoin are banking on, is the high reward aspect of Bitcoin. Where the value could multiply by 50 or even 100 times its current value. Investing in Bitcoin could provide a great hedge against the currency system, and the value of currencies held around the world, making a great asset to own during recessions and economic downturns.

3 - Cash

During recessionary periods, cash is king. It allows one to enter positions at true undervalued evaluations, allowing one to maximize their profits, and earn dividends along the way. And in case that we have a prolonged recession, where the economy and the markets go down or trade sideways for an extended period of time, investing in value dividend stocks makes the most sense. Not only is one getting the most bang for their buck, by investing in solid companies that are not only undervalued, but have strong balance sheets, and are not over-leveraged in paying out dividends, but they also provide a great way to earn passive dividend income over an extended period of time.


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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research prior to investing in any asset. I am merely sharing my opinion, with no guarantee of gains or losses on investments.



#bitcoin
#recession
#retirement