Everyone is talking about it: Interest rates are rising, investments are falling, and it almost feels like the world might stop spinning. Okay, maybe not that last one! Economic experts are declaring an end to the bull market and are preparing for a long winter. In other words, market prices are no longer expected to rise at the rate and duration they have over the last decade. But that doesn’t mean you should stop saving and investing – rather the opposite. Here are three great benefits to investing in a down economy. If you followed our previous article, “Three ways to make your investments flourish” you’ll get value from this one, too.
Bargain Prices
Investing in stocks when prices are down is an act of faith. But, if you can pull it off, then you may be set up for a large return on your investment. Buying stocks when they are down can be difficult because it’s easy to imagine that line dwindling down forever. But bargain prices are exactly what you want when you’re investing for the long term. If you’re prepared to hold your investments through economic turmoil, you could be poised to earn more when the stock bounces back, and you will keep earning as it climbs.
Protect Against Inflation
Inflation is always knocking at the door, but this year it practically barged in. Liquid assets, especially cash not stored in an interest-earning account, are losing value as they sit. The interest earned from investments can help counteract the lost value from inflation. Any money that can be spared to invest is money that can work for you, and often seeds substantial growth through capital gains. Keep enough liquid assets around to feel comfortable and prioritize a savings account just for emergencies. Once you feel safe with your available cash, you can maximize value by investing the excess. Savings account rates are also increasing with inflation, so take advantage of high-paying certificate of deposit (CD) accounts, such as our Rising Rate CD, for a secure savings option.
Savings = Security
Saving money is better for you in the long run, giving you financial security and capital when you need it most. When times are tough, many people mistakenly lean into their spending habits, trying to change their lives with each subsequent purchase. It can feel good to surround yourself with new stuff, but too often these purchases lead to financial insecurities. Saving your money is how you keep your power. Saving money allows you to take advantage of opportunities that might have been inaccessible without enough funds. Protect your excess income now so that you can benefit from it when you need it most.
If you are ready to use some of these tips and make a positive change in your financial habits, consider booking a free consultation with a financial advisor through Wealth Management Powered by Main Street Bank. Improving your relationship to money doesn’t need to be intimidating. Consider connecting with a specialist to walk you through optimizing your budget, organizing your investments, and securing your financial future. Sign up for your free consultation today.
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Registered Representatives offer securities through Securities America, Inc., Member FINRA /SIPC. Advisory services offered through Patriot Financial Group Insurance Agency, LLC in association with Wealth Management Powered by Main Street Bank. All are separate entities. There are no bank guarantees. Investments may lose value and are not bank deposits. Investments are not insured by any Federal Government Agency and are not FDIC insured.
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