The United States economy is looking shakier than it has looked since 2009, when we had the housing crash, bringing about the “Great Recession.”
There has been a constant specter of a financial collapse over the country since then, with one financial guru or another predicting that coming collapse.
But now things are looking much shakier, as the economy finally reacts to the effects of the pandemic. Thousands of small businesses are closed for good and a number of major chains seem to be following in their wake.
Unemployment is slowly coming down from the high in 2020, but some of the relief efforts that the government has taken are making it hard to get people back on the job.
Why Is That So?
On top of all that, the trillions of dollars that Congress has borrowed from the Federal Reserve Bank, essentially creating money out of thin air is starting to cause a very predictable rise in inflation, which in turn is likely to push us into a recession.
This can have serious repercussions for us all. Not only does it inflation affect our buying power, with our disposable income not going as far; but it also affects investments. Whatever value you or I might have in any current investments, is going to go down, even if the apparent cash value might go up.
But what does up mean, if everything else costs more?
You Might Have Investments You Don’t Know About
What’s that? You don’t think you have any investments? Do you have a retirement account with your employer?
Then you have investments. It’s probably in the form of a 401K, which is used by many companies so that you can take whatever retirement funds you’ve accrued from one job to another, helping ensure that you will have something more than Social Security to live on when you reach retirement age.
With that being the case, any negative pressure on the economy and especially any recession is going to result in a negative effect on your retirement.
Related: 5 Ways Prepping Has Helped With My Retirement
You may not see it directly right now; but when the time comes for your annual review of your retirement account, you’ll probably see that you’re not going to get as much when you retire, as you thought you would.
That trend is likely to continue, as long as inflation is on the rise and/or the economy is likely to go into recession. At this point in time, there’s really no way of knowing just how long this is going to last.
But what can you do? Those retirement funds are normally managed by professionals, with you not having any direct contact with them or control over how they are invested. Or do you? Are there things that you can do with that money, which still meets the requirements of the law, but protects your investment at the same time?
The answer to that question is yes. While we don’t always have the option of making specific decisions on specific investments, most of these retirement accounts do allow us to choose between a variety of different investment “tracks.” Then, of course, any money we have invested in our 401K from previous employers is ours, giving us a whole lot more control. The question then, is just what to do?
Recession-Proof Investments to Consider
Fortunately, there are some investments which are pretty much recession-proof.
Knowing which those are gives you the opportunity to make wise decisions in how your 401K is invested. Considering how shaky the economy is at this time, that’s something I wouldn’t waste time on doing.
The first rule here is to look for safe investments.
That means forgoing those with a high yield, in place of those which are considered steady. The 3.76% yield on 10-year Treasury notes may not seem like a very good investment, it’s a whole lot better than losing 10%.
Bonds are usually considered one of the safest investments on the market.
US Savings Bonds, Municipal Bonds and other bonds issued by government entities may not pay high-interest rates, but those entities are highly likely to pay back whatever money they borrow. An investment portfolio made largely of bonds may not seem exciting, but it is secure.
Conservative Investment Funds
There are also other conservative investment funds around, such as Money Market funds.
These fall on the low-yield end of the spectrum as well, especially when compared to any sort of junk bonds.
While the junk bonds typically have a higher interest rate, there’s also a chance of them defaulting during a time of recession, leaving you with 10 cents on the dollar.
Another rather solid investment is utilities, especially the energy sector.
Related: 9 Places Where You Can Find Energy After An EMP
Again, this isn’t the place to make a killing on the Stock Market, as these companies don’t generate new products that can boost the value of their stock. But they are solid, stable investments, which also usually pay dividends.
Dividend Stocks
Perhaps one of the least understood ways of getting the most out of your investment dollar is dividend stocks. These are stocks that pay out a dividend quarterly or annually. The key here is to set it up so that those dividends are automatically reinvested, increasing your portfolio size.
While that cash might be nice to have right now, so that you can buy that new car or big-screen TV, it’s better to build your retirement, so that you’ll have that money when you really need it.
Precious Metals
Finally, don’t forget about precious metals.
If there’s anything that can be said to be a sure thing in the investment world, it’s that when the value of the dollar drops, the value of gold and silver goes up. While you probably can’t invest in actual gold ingots, coins and bars as part of your 401K, there are still ways of investing in precious metals, including in futures.
Think About the Long Term
Remember that the economy tends to be cyclical, although it’s not a cycle that can easily be predicted.
Even so, short-term dips in your investments can be survived, when you look at the long-term.
So don’t panic and try to sell out if you see something going down. Rather, ride it out and wait for better financial times.
Your investment will most likely grow again, giving you the money you need for retirement.
You may also like:
EMP Commission Chief of Staff Issues Dire Warning to America
The Superweed That Saved Large Communities During The Great Depression (Video)
I held an on-line discussion with a neighbor in a political forum, on our town. She’s moderate, but has a strange idea about finances. She actually thinks minimum wage is there to help the poor. I had to explain to her that minimum wage is, always, the poverty rate. When it goes up, so goes the poverty rate. The price of everything jumps to match. Then people with higher paying jobs have to have a raise because they need more than poverty rate to get by. Then taxes jump, and it starts all over again. In the end, anyone earning minimum wage is left with less buying power then he or she had at 10/hour.
Today, what cost me 100 bucks in 2018 is now over 200, but I got no raise in pay. This is how the dnc pays back some of the debt they put us under. Inflated dollars worth much less than when they borrowed.
niio
If you can without going overboard, try to buy what you need now especially items that don’t go bad and you know you won’t be able to do without.
CC: Now, before the price rips off the ceiling and the roof. BTW, for anyone reading this, WalMart does deliveries free if you purchase a certain amount. I would also invest in chia seeds while they’re inexpensive ($6.00.pound). they can be kept for years and remain good, and American Indian slaves often lived on a tablespoon or so a day, and remained strong. One of the best places now is food for life, in NYC. They offer free shipping. niio
Red: You are 100% correct. It is troubling that so many people
do not have even a basic understanding Economics and Finance.
Kay: I remember the Carter Depression too well. Since then, I’ve watched the economy. A dem in the white house usually means a recession or a depression, unless the repubs get control of the House and senate. The old-timers (which I’m now one of 🙂 always stocked up if the dems were going to get control. Always put a lot of cash in hiding places. I learned to love canning under Carter 🙂 niio
This is bullshat! The article ASSUMES that the law will be obeyed, which it will not!
Liquidate your investments NOW, before the traitors infesting our government take it all. Just like they did in Greece!
TAL: When did the dnc ever obey their own laws? I can’t count how many times a dem said the Constitution is a living document. Change at will to satisfy the greed of the dnc and their owners, soros and wyss. If I owned gold, even silver, I’d hide it now. Never trust a lockbox or a bank. They have to obey. niio
Silver bullion is the only way to preserve your wealth – besides land and the ability to feed yourself. If you want to have a means of exchange, you will need silver. Not gold, not bitcoin, not even barter. And while you’re at it, sanctify your wealth. Don’t let it just be money. Let it be a point of conversion too.
https://www.centurysilver.com/pages/why-silver
The article is about protecting your 401k. The recommends are bonds, dividend stocks, and precious metals. This is how I would break those down.
Bonds? The same problem of the government buying too many of its own bonds is recommended for when the default comes? Whose bonds will it honor by redeeming and giving back your money, yours?
Dividend stocks I can support, perhaps the ONLY form of continual wealth. The biggest caveat? To borrow a phrase, “choose wisely”.
Precious metals? You have got to be kidding me! Perhaps you had seen all this coming. I know I have, but my ability to purchase large sums of precious metals takes a second seat to bills, family, health etc. Buy some today? I CHALLENGE you to find an ounce of silver that is NOT priced 20% OVER spot price? Go to the internet, your local coin dealer or your broke buddy wanting to off load a few coins. They all want 20%-25% more than spot. The demand is that high. All that is available is an ounce of gold. It is so expensive as to be impractical. How will anyone split the value of the coin? At least on a local level. I read about a mega corp buying 100 oz bars yesterday. Try buying groceries with that!
I might have suggested ammo two years ago.
Perhaps my grandparents did it best by canning everything that they could get their hands on. Now both of them have been gone for nearly 30 years and I am the grandparent now. We visit neighbors and friends taking the unwanted excess and can and dry. Just don’t look to fat when the hard times comes?
Yep, Lead & Food are the best investments with the war looming on the horizon!
I kept a lot of my retirement in bonds over the years and always made at least a little money, but the 4 trillion dollars in funny money Trump made available to the market has driven bonds into negative return for the next few years. His trillion dollar unpaid for tax cut revved up Obama’s sleepy economy, but T was counting on 4-5 % yearly economic growth to pay for his cuts, of course the reason you don’t spend beyond your means is you don’t know what will happen in the future, Trump’s economy was ruined by the pandemic, and that tax cut is going to multiply as debt for a generation. Now that idiot Biden wants to print his own 4 trillion, Obama did it, W Bush ran up debt like an ill educated drunken Texas buffoon. So you people quit calling out the Dems for their stupidity, there’s plenty to go around.
The article is even more basic than a Suz Orman infomercial and kinda swerves between stuff you can and cannot do in a 401K. If you are going to keep money in a retirement account your only true protection against loss is time. Even with huge losses in a major downturn the average 401K recovers its value within 5-10 years. I met with my Fiduciary earlier this year because I can’t afford to keep losing money on bonds, she said she expects stocks to take a big loss sometime in the next year or two so we buy in with the expectation of loss at some point that we more than recover over a period of 5 years.
Or, the economy could completely collapse and my IRA disappear in a puff of smoke. But I have money in safer places.
The most important way to protect yourself against bad times is to have no debt. Decide on a place you can stay in for life as early as possible and work however hard you have to to get it paid for. Old cars, old clothes, cheap vacations, home cooking and don’t borrow money to put your kids through college. Make your goal homesteading independently, or retiring early, in no case should you postpone retirement past 62. They say you can double your social security waiting until 70 to retire, but your chance of a major health problem ruining your retirement after 70 is unbearably high. We retired at 62 and had a great time til my wife was disabled by the West Nile Virus last year. But we had 12 years of endless vacation before that.
I was lurking around the Dark Web years ago and learned about this crazy new thing called Bitcoin. I investigated it and almost, almost, talked myself into investing 10k in Bitcoin. DOH! If I had I’d be so rich now I’d have my own Cajun Chef and live off Gumbo, Boudin, and Johnny Walker Blue.
The gov. is going to raid wall street, just like they did in Greece!
You would’ve never seen a return on that bitcoin investment.
JH – An important part of my retirement plan, was to make sure my children developed their skill base and were well education. If that meant less money deposited at the time in my retirement account, so be it. They now make more than I could have every dreamed of, and that my friend is retirement security. I do not have to worry if they or their children will be well cared for. I do not have to worry that they will be asking me to support them. I know that if I ever needed a hand, they would be right there because they appreciate the sacrifices I made along the way to make sure they could realize their potential. Look at the education of your children as an important investment and make sure you get a good return.
We want what’s best for our children, and I am thankful for the opportunity I had to go to a State college when tuition and fees were 720.00 for a full year. But it’s around 12000.00 a year now not including room and board. Most jobs start a person with a 4 year degree around 50,000 a year, I helped subsidize my grand-nephew going to a top notch welding school in Waco, it cost 20,000 total and he went right to work in the Permian Basin and now makes 125,000 a year. My favorite niece went a different way, waitressing at high end restaurants, taking a semester of college every couple of years until now, at 45, she has a Master’s in counseling of some sort and works for a private school in the PDRK (LCC!) as a Psychologist making 125k with no student debt. Shoot, I have a nephew who is pretty much Forrest Gump but a bit smarter with a high school degree making 75k with full benefits and a company truck doing railroad work, of all things.
These days you have to be willing to honestly judge the benefits of a university education dragging you down with debt vs the benefits of learning a trade or pursuing non-traditional education.
Honestly, I’m an old coot who hasn’t owned or worn a suit since 1970, I always advise everybody, learn a trade!
An article on riding the wave in a financial storm would be most helpful here. Basic savings plans, like your average 401K is only a small part of one’s financial position. Better to take stock of your entire holdings and work up that personal balance sheet to see exactly where you stand. From there it’s pretty easy to see what your next steps should be. Just remember, the only one guaranteed to make money in any financial transaction is the financial institution making the transaction on your behalf. Now is not the time to jump into anything or make poorly weighted hasty decisions.
Dan Celia of Financial Issues gives a lot of excellent advice about retirement and all the issues surrounding us in todays world. https://financialissues.org/
Judge Holden stole all my thunder 🙂 Stay OUT of Debt. Some say hyperinflation is near go go into maximum debt as you’ll be paying off in “Cheaper dollars”. History shows that Banks OWN Politicians or are destroyed BY Politicians. Debt will be re-evaluated when the Fiat Money changes names, seen in Mexico and many other countries over the past 60 years.
Stay out of debt.
Skills, well paying skills like plumbing will STILL be well paying needed jobs later. Learn to swap services for services to keep the Beast out of your wallet as much as possible.
Trusted friends with useful skills, tools, storage foods, chaos kit supplies to repair houses and needed stuff and a excellent garden OR a few excellent gardening friends will do well as the Dollar turns into the Peso.
I thought about big tech stock funds. They are in cahoots with the crooks in govt. Their stocks generally grew during the pandemic like Amazon etc. During the down turn would these stocks be protected some as they are in on the whole thing?
While I leave it up to you, penny stocks usually make a nice return. Since big tech betrayed Trump, half the world is turning them away or fining them millions. they’re losing billions. My only investments are the house and land. niio