Global recession, the recession is getting worse; How to make an investment plan, what precautions to take, know – how to make an investment plan in fear of recession what precautions are necessary to avoid crisis
Although rating agencies around the world claim that this recession will not affect India much, it is believed that the US recession has also affected the Indian market. In such a situation, it is important for you as an investor to prepare your financial strategy now. Here, let’s try to find out what you should avoid and what type of strategy you should plan for during the recession.
global recession crisis; World Bank warns, result of aggressive central bank rate hikes
In times of recession, incomes are particularly affected due to lower business income and fewer job opportunities. In such a situation, keeping debts low would be an effective measure to survive the crisis. In such a case, try to pay some EMI in advance to reduce the EMI of the loan, so that the burden on you each month is reduced.
Also, try to avoid high interest rate loans like personal loans for fear of recession. Banks consider these loans risky and also charge high interest on them. In such a case, if you can limit your spending and avoid borrowing, it can be an effective way to protect your personal finances against the fear of recession.
Change job or not?
Most companies surrounded by fear of recession began to downsize during this period. If the hands of a debt-ridden employee, etc. and daily expenses are emptying, a mountain of problems can fall on him. Therefore, insist on participating in a company whose financial position is strong enough to withstand the shocks of the recession. If you’re already associated with a strong business, it’s best to hold on until the fear of recession has passed and not get into trouble with the desire to raise cash.
Create multiple sources of income
When jobs are first hit during a recession, having only one source of income can be extremely detrimental in that environment. If you work in the private sector, where there is more risk, certainly create more than one source of income. To do this, control expenses and accumulate funds through investments, which will become your second source of income.
Life and health insurance…compulsory
Many people have seen during the corona infection how expensive it can be if hospitalization is needed during the recession. So it would be better if you have a good health insurance policy which can avoid such problems. A life insurance policy is equally important, as an untoward incident with the head of the family will add to the financial difficulties. This makes insuring yourself in the event of a recession an effective step.
Create an emergency fund
Financial needs and crises are never predictable. That’s why you should have a good provident fund, which is at least 6 times your salary. This fund can save you trouble in the event of job loss or sudden need. Investors should ensure that they have sufficient funds in their accounts. Also, if you wish, instead of depositing this amount in a savings account, you can keep it in a liquid fund, which offers better interest rates than a savings account.
Stay away from the stock market
If you are new to the stock market, you should avoid investing for fear of a decline. Most companies want to preserve their capital during a recession, which also affects their stock market performance and causes stocks to fall. So investors should stay away from such a situation, which will not cause you any financial loss during the recession. It would also be better if you kept your investment in a mutual fund for the long term.