Beyond Equities
There are few things that can set back your retirement savings or your investment portfolio like a recession. During a recession, stock markets typically take a steep dive and can take years to recover to pre-recession levels.
Not only can a recession lead to a major dip in your savings, but it can also impact your income if you’re laid off or if a recession stagnates wage growth.
Recessions can impact your savings no matter what stage of life you are in, and with the cyclical nature of the economy, they are inevitable.
That doesn’t mean you have to go with the crowd and take the same hit that everyone else does. Diversifying your portfolio to include more than stocks and mutual funds can mitigate the full impacts of a recession. These alternative assets can help you weather recessions and protect your savings from the cyclical nature of the economy.
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Bullion: Gold and Silver
Gold, as well as its cheaper cousin, silver, has long been considered a safe haven asset. When stock markets collapse, demand for bullion skyrockets.
Not only is gold considered to be “recession-proof,” but it also provides investors with a greater sense of confidence and certainty in an uncertain world.
Gold is also a proven inflation hedge, and while it can’t promise the same growth that a rising stock market can, it is much better at preserving your wealth than cash reserves. Bullion is where wealthy people park money that they don’t want to put at risk but still want to protect from the slow loss of value that comes with inflation.
Physical bullion comes in the form of bars and coins that you can purchase directly from bullion dealers like Global Bullion Suppliers. This is often seen as the lowest-risk way to own bullion.
Real Estate: Adding Income to Your Portfolio
Real estate can be a tricky asset to include in your portfolio. For many everyday investors, their own home will be the largest single investment they make. Including an income property can mean too much exposure to a single market when they could be earning higher yields on the stock market.
However, real estate can provide a great alternative to equities and provide a steady stream of income in the form of rent. Ideally, real estate will appreciate over the years if you maintain it well, and you can make a significant profit when you choose to sell later on.
The trick is recognizing that real estate does come with risks. You can face unexpected repairs, and you need to take steps to make sure it’s rented out.
Cryptocurrency: Emerging from a High-Risk Environment
Cryptocurrency is always making headlines, sometimes because of Bitcoin and others’ skyrocketing prices and sometimes because the bubble has burst.
Cryptocurrency has been a risky investment for the past several years, featuring high volatility and major price swings. However, after crypto prices plunged earlier in the year after some high-profile companies collapsed, prices have stabilized, and the case for investing in crypto has expanded once again.
When it comes to high-risk, high-reward investments that aren’t on the stock market, cryptocurrency can satisfy that role in your portfolio.
Alternative assets can help your long-term savings growth by coming out of recessions better off than equities.