What are smart investments during a depressed economy?

Answer by  mem4dr (1378)

Buy shares in an index fund, such as Vanguard. In a depressed economy, stock prices are usually relatively low. You could benefit greatly from purchasing shares in an index fund when prices are at rock bottom. An index fund will give you the average return of the stock market for a given period of time.

Answer by  Emr (698)

The best thing is to pay down debt. Your credit cards carry over 12% interest. By paying that off, you can actually save.

Answer by  practical39 (7)

I believe that if you are making monthly deposits into a no load mutual fund then you should continue to do so. This strategy allows you to buy low and when the market does come back your investment will grow quickly. Do not expect too much return. Buy small, buy Savings Bonds or open a certificate of deposit.

Answer by  Wolverine (42)

Smart investments during a depressed economy include gold, silver, blue-chip stocks, dividend-paying stocks and other stable, established stocks. You might also consider investing in money market funds or CDs until the economy has turned around to protect your capital.

Answer by  demannlv (179)

You need to be very careful due to downward market trends. Your best bet would be investing in mutual funds that invest in the bond market or GNMA market.

Answer by  SallyJ64 (3121)

Since the stock market is down, stocks are cheaper. This is a good time to buy S&P500 index funds since they most likely will bounce back in the long run

Answer by  tamarawilhite (17883)

1. Pay off your debts. The interest rate is a certain return on your money. 2. Property, such as a house, since prices are low and likely to increase.

Answer by  LippoTheHippo (67)

Typically during economic downturns the best investments are in companies whose business depends on nondiscretionary spending. There are things people need to live regardless of economic conditions, and the companies providing them are relatively immune to the business cycle. Examples of these would be companies manufacturing medicines or consumer staples.

Answer by  PGR (74)

Not all parts of an economy are depressed at the same time. So it is important to determine how certain classes of investments have been affected and to predict the extent and time frame for recovery. Unless you have some special expertise or knowledge the best investments in these times are debt obligations of major, essential companies.

Answer by  Daigle83 (66)

During recessions, dividend paying stocks are normally safe bets to increase your net wealth. In addition, emerging markets and international investments will increasingly be a smart idea considering the dollar will continue to fall in relation to other world currencies.

Answer by  Baobao (1273)

You can invest on gold and new funds since the overall future is good.You also can train yourself as an investment to enhance your own capabilities.

Answer by  Abulia (16)

Utility stocks and stocks that pay large dividends tend to be good investments during a depressed economy. Avoid consumer stocks, bank stocks, real estate, etc. Alcohol sales tend to increase during a depressed economy (you can guess why) and low-end consumer staples tend to hold there own, like Kraft foods or Campbell's soup.

Answer by  callitkarma (23)

There is honestly a grey area around the term smart investments. Low risk investments are the most stable with less return. High risk investments are more volitile with higher return.

Answer by  tamarawilhite (17883)

First, pay off all debt. The interest rate on the debt is a guaranteed rate of return, something difficult to achieve in a depression.

Answer by  Baobao (1273)

Gold bars are people's favourite investment, gold keeps its value and deals well with inflation.Learning new things to equip yourself is also a good one.