| How to Invest Ahead of a Recession Posted: 03 Feb 2020 04:00 PM PST Market predictions often aren't accurate, and it's seldom wise to attempt to time your investments to match the whims of market movement. However, if all signs point to a recession on the horizon, there are things you should do to strengthen your portfolio and your own financial standing so you'll minimize your losses during the downturn. With careful planning, you might even manage to make some money. Work with your broker to balance your portfolio and make investments that go beyond your country's borders.[1] [Edit]Rebalancing Your Portfolio - Sell weaker stocks when prices are high. If you have underperforming stocks in your portfolio, look at their past value and go ahead and trade them when the price is relatively high compared to what you bought them for or what they've traded for in the past. You may not make much of a profit, but if there's a recession looming, you don't want underperforming stocks in your portfolio. If those companies weren't doing well before the recession, they'll likely do even worse during the recession.[2]
- Check with your broker before selling off too many stocks. Some firms charge additional fees to investors who hold high cash balances.[3]
- Move some of your investments into bond funds. Because government bonds carry little to no risk, they're strong investments to hold during a recession. While you likely won't make a significant profit, you don't have to worry about losing your money, which is a risk with any stock during a market downturn.[4]
- Bond funds invest in many different types of bonds, so they're automatically diversified. You might also consider municipal bond funds, which are issued by local governments.
- Corporate bond funds generally have potentially greater returns, but they also entail greater risk. However, corporate bond funds are still less risky than investing in most stocks during a recession.
- Invest in food, raw materials, and energy sources. Because these commodities are traded globally, a recession in one country won't necessarily impact the demand for them. This keeps the value relatively steady. Some commodities, particularly basic raw materials and food, may even increase in value during a recession.[5]
- A recession in one country may not even affect the demand for some materials on a global scale. Good commodities to invest in ahead of a recession are raw materials such as gas or wood, which developing countries, in particular, consume a lot of.
- Grains, such as rice and wheat, are also good staples to invest in if a recession seems imminent.
- Place a trailing stop-loss order to minimize your risk. With this kind of order, you choose a price that you're comfortable with and your broker will automatically sell the stocks you specify if their price drops below that level. This can help you minimize your losses during a recession, especially if you've decided to hold on to riskier stocks.[6]
- Research the performance of the stocks you're still holding so you know where to set the price for your stop-loss order.
- You might also look at what you initially had invested. For example, suppose you bought 100 shares of a company when the stock was priced at $10 a share. Today, the shares are trading at $50. In that situation, you might want to set your stop-loss order at $15. If the shares dip that low, you won't have to worry about continuing to lose any money, but you'll still earn a little off of your investment (and a little is better than nothing).
- Plan on buying index funds when markets are low. Use some of the cash you generated when you sold off underperforming and high-risk investments to take advantage of low prices when the recession hits. Index funds, which track a market index such as the S&P 500, are relatively low risk, so you'll profit off of them when the market starts to pick back up as the recession ends.[7]
- If you have a full-service broker, talk to them about your plans. They'll help you identify undervalued funds that you could potentially make a profit on when the market rebounds.
[Edit]Buying Recession-Resistant Stocks - Look for companies with little debt and strong cash flows. In a recession, a company with a strong balance sheet will perform better than one that has taken on a lot of debt. A highly leveraged company was losing money before the recession hit and that trend will likely get worse.[8]
- Look closely at the amount of debt a company is carrying. If the company becomes unable to make its debt payments and is unable to handle the costs of continuing operations, it may fail.
- Some stocks from established companies with strong balance sheets also pay profits to shareholders in the form of dividends. These stocks can generate a little passive income, even during a recession.[9]
- Avoid brands that decrease their marketing ahead of a recession. When a recession is looming, some companies cut costs by lowering their advertising budgets. However, if companies don't advertise during a recession, demand for their products tends to decrease. These companies may fail to bounce back even after the recession is over.[10]
- Research the ad spending of companies you're interested in on the internet. If you notice a significant decrease, that may be a sign that the company is looking inward over the course of the recession rather than trying to expand and attract new customers.
- If you watch TV, pay attention to the products and brands that are advertised and how frequently those ads run. A company with heavy prime-time advertising may be worth looking into, especially if they sell a more basic, commonly used product.
- Invest in consumer staples that people will always buy. Regardless of the economy, there are some things that families will always need to purchase. Foods, household goods, and feminine hygiene products can be strong holdings during a recession.[11]
- Keep in mind that when family budgets get tight, consumers may steer away from name-brand products in favor of cheaper generic versions of the same thing. Investing in household basics is no guarantee that you won't lose money when the recession hits.
- Diversify across multiple sectors. While it's smart to keep to core sector stocks, you still want to ensure that your portfolio remains balanced during the recession. In addition to staples and basic household goods, include stocks in healthcare and utilities. Like household goods, regardless of the market, people will still get sick and people will still turn the lights on — so these sectors will remain in steady demand.[12]
- For example, if 20% of your portfolio is made up of stock holdings, you might invest a third of that in utility stocks, a third in healthcare, and a third in consumer staples.
- Invest in real estate when prices drop if you have experience. Many investors are afraid of real estate when a recession hits. However, if you're an experienced real estate investor, buying real estate when prices are relatively low can expand your portfolio by giving you the opportunity for passive rental income during the recession and increased equity when the market recovers.[13]
- Make sure the property is ready to rent out and won't require additional investment on your part, because you have no way of knowing what the property will be worth when the recession ends.
- If you already own a second property, such as a vacation house, you might also consider renting it out to earn income from it.
- Hiring a property management company to deal with the day-to-day aspects of renting can make being a landlord less of a hassle. However, you might want to stay away from real estate investments entirely if you have little to no experience managing real property.
[Edit]Improving Your Financial Health - Pay down your consumer debt. If you're carrying a lot of debt on credit cards, try to eliminate as much of it as you can before the recession hits. That debt will end up costing you more money when the market's slow and money is tight.[14]
- If you've made money selling underperforming and high-risk stocks, you might use some of that to pay down or even pay off your credit cards.
- Don't close credit card accounts if you've paid them off. Doing so will lower the amount of credit you have available, which could, in turn, lower your credit score.
- After you pay off cards, keep them active by using them for small purchases and paying the balance in full each month. For example, you might use a credit card to automatically pay your mobile phone bill, then pay the credit card balance when it comes due each month.
- Check your credit report for errors. Get copies of your credit report from each of the reporting bureaus and analyze the entries. If something looks unfamiliar or doesn't match your records, it might be an error. Disputing errors on your credit report may increase your credit score.[15]
- While there are companies that will complete the error dispute process for you for a fee, you can do it yourself for free. Most credit bureaus allow you to start a dispute online, or you can call their toll-free customer support number.
- You might also bring the issue to the attention of the creditor that posted the entry. They may be able to fix it more quickly than the credit bureau can.
- Renegotiate or restructure high-interest loans. If you have a good credit score, you may be able to get a better deal on some of your more high-interest loans. Restructuring or refinancing makes sense when a recession is looming because it means you'll be paying less in interest when your budget gets tight.[16]
- If the recession hits you particularly hard and you find that you need to refinance a loan, you'll likely find that it's much harder for you to do so. If you can't pay off those loans, talk to the lender about lowering the interest rates before the market enters a recession.
- Cut unnecessary expenses from your budget. Take a look at your monthly expenses and see what you can eliminate before the recession hits. If you already have a lean budget, you won't have to worry as much about making ends meet if the recession impacts your own finances.[17]
- For example, if you have subscriptions to 3 different streaming services, you might consider cutting down to 1 that you watch the most.
- Unnecessary expenses may also include insurance policies that aren't legally required and don't actually protect you from anything major, such as collision insurance (if your car is paid off) or accidental death insurance. You can eliminate many of these policies.[18]
- Build up your emergency fund. Make sure you have at least 6 months of living expenses set aside in a savings account before a recession. You never know what might happen during a recession or how bad it will get before the markets rebound.[19]
- For example, if the recession puts a squeeze on your employer, they may have to restructure or downsize their workforce. If you end up unemployed during a recession, you want to make sure you can still make ends meet — especially since it might take you longer to find a job during dismal market conditions.
- Look at your budget and calculate how much your living expenses would be for 6 months. If you don't have that much money in savings, temporarily adjust your budget so that you're putting more money into savings until you have at least that much available.
[Edit]References |
| How to Style Chelsea Boots (for Women) Posted: 03 Feb 2020 08:00 AM PST Chelsea boots are known for their versatility and can easily complement dressy and casual looks. Pair your boots with skinny jeans, a graphic T-shirt, and a leather jacket for an edgy, street-ready look. For a boho-inspired outfit, wear your Chelsea boots with a knee-length vintage dress. If you want to wear your boots to work, go with loose-fit, cropped dress trousers and a long-sleeved blouse. Top off this office-ready ensemble with a matching slim-cut blazer or chunky knit scarf! [Edit]Building Casual Outfits - Pair skinny jeans with Chelsea boots for a cool, street-wear style. Slim-fit and skinny jeans look great with Chelsea boots, especially if you cuff them once or twice to really show off the shoe. This look is incredibly versatile, so your options are almost limitless when it comes to color combinations and tops![1]
- For an edgy vibe, wear black leather Chelsea boots with distressed black skinny jeans and a graphic T-shirt. If the weather is chilly, throw on a matching long-sleeved flannel and leave the shirt fully unbuttoned.
- Take the edgy vibe up a notch by pairing black leather Chelseas with slim-fit pin-striped trousers and a black leather jacket.
- You can also wear light wash skinny jeans to create a more laidback vibe.
- Wear Chelsea boots with a vintage dress for a boho-inspired look. Go with a floral or paisley patterned dress in a vintage cut. Choose something that falls to about knee-length to really show off your shoes. If weather permits, you can wear ankle socks and keep your legs bare. If it's chilly, slip on a matching pair of tights with your dress![2]
- If you prefer skirts to dresses, try a flowing midi skirt and loose boho top with your Chelseas.
- Avoid wearing Chelsea boots with long dresses that cover up the shoes.
- Go with black jeans and a neutral-colored sweater for an everyday vibe. Black Chelsea boots pair well with simple, solid earth tones like cream, burgundy, charcoal, and tan. These colors are also easy to mix-and-match! Grab your favorite solid-colored sweater and comfy black jeans for a look you can rock pretty much anywhere.[3]
- Be sure to cuff the jeans or go with a pair that's slightly cropped so that your boots are fully visible.
- For example, wear black jeans with a dark gray sweater and black Chelsea boots. You could also try statement Chelseas, like leopard print, to jazz up your look a bit.[4]
- Throw on a knee-length tan coat or a black beanie to add another dimension to your look.[5]
- Create a fun, offbeat look by pairing denim overalls with your boots. For a cute, simple look, wear a plain white T-shirt under the denim overalls. Be sure to get denim overalls with a tapered leg and cuff them 2-3 times so that your calves show. Then, put on long, stripey socks so they'll be visible between the top of your boots and the cuffed legs to complete this quirky look.[6]
- Medium wash denim works well for this, but you can definitely experiment with other washes.
- Wash refers to the color of the denim. Medium wash denim is a medium blue color that typically isn't faded at all. Light washes often look faded and range from light blue to almost white. Dark wash denim looks navy or almost black.[7]
[Edit]Creating Dressier Looks - Pair black leather boots with a black turtleneck and dress pants. An all-black outfit instantly creates a more refined silhouette, so go with black dress pants and a black turtleneck to create a sleek look. Choose a slim-cut turtleneck sweater that falls just below the waistline.[8]
- If you want to add some color, top off your outfit with a preppy plaid blazer or tweed coat.[9]
- Don't forget accessories, like black leather gloves, to complete this elegant look.
- If all-black isn't your style, try tan dress pants with brown suede Chelsea boots and a light-colored sweater. Top it off with a matching blazer.
- Wear statement Chelseas with high-waisted leather shorts for a night out. This is a great look for a party or a night on the town! Pair the high-waisted leather shorts with a matching camisole and loose, flowing kimono. Keep your legs bare and wear Chelsea boots in an eye-catching print, like snakeskin, or a bold color, like burgundy.[10]
- For example, go for an all-black ensemble and wear a pair of red patent leather Chelseas for a cute pop of color.[11]
- Go with a pencil skirt and a long trench coat for timeless elegance. A trench coat in a neutral color, like tan, navy, or black, is easy to style with almost any outfit! If you're headed to the office or an event, try a pencil skirt in a neutral color, like navy or black, with black Chelseas. Add a slim-fit, long-sleeved top and finish the look with the trench coat and a matching silk scarf.[12]
- For a pop of color that still feels sophisticated, try wine-colored leather Chelsea boots with a tan trench coat and black pencil skirt.
- Try cropped, wide-legged trousers with Chelseas for a work-ready outfit. This look is easy to throw together in the morning before heading to the office. Put on a cropped pair of dress trousers that have wide legs. Add a long-sleeved blouse in a complementary color. Add a matching pair of Chelsea boots to complete the look.[13]
- Elevate the outfit by adding a slim-cut blazer and chunky knit scarf.
- Keep things simple by wearing solid, neutral colors.
- Try cuffing slim-fit trousers and jeans with Chelsea boots. This looks modern and cool with almost any look and also shows off your awesome Chelseas.[14]
- Wear Chelsea boots with fall and winter clothing.
[Edit]References |
| How to Save Gas when You're Driving Posted: 03 Feb 2020 12:00 AM PST Saving gas is good for both the environment and your wallet. While keeping your car in good condition and using a fuel-efficient vehicle are good methods to accomplish this goal. You can also take several steps while driving to save gas. Drive smoothly and avoid stop and go habits that reduce fuel efficiency. Drive within the speed limit to reduce wind drag on the car. When running errands, plan the route to avoid traffic and slowdowns. These tactics will all help make your car much more fuel-efficient. [Edit]Adjusting Your Driving Habits - Drive the speed limit to eliminate excess drag. As cars increase in speed, wind drag makes the engine work harder to keep the car moving. This burns fuel at a much higher rate. Keep your speed at the posted limit or just below it for the best performance.[1]
- While all vehicles hit their peak MPG at different speeds, generally, cars are most fuel-efficient at around per hour. Going faster than that reduces fuel efficiency.[2]
- If the posted speed limit is higher than this, drive in the right lane so other motorists can pass you.
- Speeding is also a safety and legal violation, so there are many other reasons to travel at the speed limit.
- Press the gas and brake pedals smoothly to avoid stop and go driving. Stop and go driving is the most inefficient way to drive a car. Even with traffic and traffic lights, you can drive in a way that reduces stop and go travel. Always work the pedals smoothly, without slamming either one. Press the brakes smoothly to avoid a jerky stop, and accelerate back up with steady pressure on the gas pedal. This increases your fuel efficiency.[3]
- Follow other cars at a safe distance to avoid slamming the brakes if they stop short.
- If you want to speed up or pass another driver, don't pump the gas pedal hard. Increase the pressure gradually to bring yourself to a higher speed.
- In an emergency, however, don't hesitate to hit the brakes hard if you have to stop.
- Release the gas pedal and coast before braking. Suddenly applying the brakes cuts down on your fuel efficiency. If you know you have to stop, plan ahead. Release the gas pedal without hitting the brakes yet and coast until the car slows down. Then apply the brakes. Since the car is moving slower, you won't burn as much fuel trying to stop.[4]
- This technique works especially well with traffic lights. Once you see that a light turns yellow and you know you won't make it, let the gas pedal go. By the time you have to stop, your car will be moving much slower.
- Again, don't do this in an emergency. Press the brakes as hard as is necessary to avoid hitting something.
- Go up hills slowly to conserve energy. While it may sound counterproductive, going slower uphill burns less fuel than going fast. The engine works harder and burns more fuel if you try to maintain your speed going uphill. Don't try to maintain your speed when passing over hills. Instead, keep your pedal pressure consistent and let the hill slow you down. You'll regain speed once you get to the top.[5]
- Check behind you before driving like this. If someone is tailgating you, they could hit you if they aren't paying attention.
- Coast downhill while keeping the car in gear. While some people switch into neutral to coast downhill, this practice actually burns more fuel. Instead, simply let go of the gas pedal and let the car coast downhill while keeping the car in gear. This way, the engine won't be working and burning fuel.[6]
- Keep your foot hovering over the brake pedal while coasting just in case you have to stop suddenly.
- Switching into neutral while moving is also potentially dangerous. It gives you less control over the car and your engine could overheat if you have to hit the brakes.
[Edit]Conserving Power - Use cruise control to save fuel on long drives. Studies show that switching into cruise control on long drives is more fuel efficient because it keeps your car at a steady speed. If you're traveling on the highway and there is no traffic, switch your car into cruise control to get the max fuel efficiency.[7]
- Pay careful attention to the road while you're using cruise control. Don't tune out.
- Don't use cruise control in bad road conditions.
- Turn off the engine if you're idling for more than 60 seconds. Idling burns fuel very inefficiently. If you're idling and know you'll be there for more than 60 seconds, then turn off the engine and restart it when you have to move again.[8]
- The best situations to use this technique are ones in which you know you'll be idling in one place for a while, such as parked at a curb, waiting at a railroad crossing, or in a busy drive-thru. It's not the best idea in traffic, unless there is a major delay and nothing is moving.
- If you're idling for less than 60 seconds, however, leave the car running. You'll burn more fuel turning the engine back on than you'll save by turning it off.
- Close your windows if you're driving faster than per hour. At highway speeds, the increased wind resistance makes your car work much harder. Close the windows and use the car's AC system if you're traveling greater than to get better fuel efficiency.[9]
- There is a long debate about whether using your air conditioner or opening your windows is more fuel-efficient. The answer is to open the windows and turn off the AC at speeds below . Faster than this, close the windows and turn on the AC.
[Edit]Planning Ahead - Remove unnecessary weight from the car. Increased weight means that the car's engine needs to work harder to bring you up to speed, meaning it burns more fuel. Make your car more fuel-efficient by taking out any excess boxes or equipment you don't use. Each pound you remove lets your car work more smoothly.[10]
- Attachments like hitches and roof racks also add weight. If you aren't hauling something on this trip, take them off to save fuel.
- Take a route with the least amount of traffic and stops. If there are multiple ways to get somewhere, take the amount of stopping into account. A road with lots of traffic lights might make you stop and idle often. Similarly, roads that are prone to traffic will slow you down. Listen to traffic reports and pick the clearest routes to maximize your fuel efficiency.[11]
- The best route will probably change depending on the time of day. Monitor traffic reports to find the best option.
- Apps like Google Maps or Waze calculate the shortest routes for your trip by taking traffic into account. Listen to these calculations to find the smoothest rides.
- Travel outside the high-traffic periods of the day if possible. This may not be possible if you commute to and from work in rush hour. However, if you work on a different schedule, then avoid running your errands at high-traffic times. Cover all your driving needs in the middle of the day or in the evening after the commute.[12]
- Keep this in mind if you're leaving for a trip as well. Leave before the morning rush to avoid slowdowns and conserve your fuel.
- Combine multiple errands into one trip to reduce travel time. Going home between each errand increases the number of trips you have to make and the distance you have to drive. Plan ahead and list all the places you have to go to. If possible, tackle all your errands in one trip for the most fuel efficiency.[13]
- For example, if you have to go food shopping, to the post office, and get a haircut one day, don't go home in between each errand. Do them all in the same trip to reduce the amount of driving you have to do.
- Also try to group errands by which ones are close together. If the supermarket and post office are both on one side of town and the barber is on the other, then go to the supermarket and post office first.
- Keeping your tires in good condition is one of the biggest ways to increase fuel efficiency. Fill them to the recommended psi for the best results.
- Unless it's below zero outside, only warm up your car for 30-60 seconds. The engine will warm up as you drive, so go slowly for the first few minutes of driving.
[Edit]References |
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