Invest a portion of your money in treasury and municipal bonds. Don't put 50% of your money into the bond market, but the bond market is a great way to safe guard your return on investment when the market is down. Typically, when the market is bad, the bond market interest rates go up.
As such, investing during a recession can be a good idea but only under the following circumstances: You have plenty of emergency savings. You should always aim to have enough money in the bank to cover three to six months' of living expenses, with the latter end of that range being more ideal.
A good investment strategy during a recession is to look for companies that are maintaining strong balance sheets or steady business models despite the economic headwinds. Some examples of these types of companies include utilities, basic consumer goods conglomerates, and defense stocks.
Cash is king in a recession!
Gold and silver are both excellent assets to have during a recession because they don't lose value based on the stock market. However, because these types of commodities do well when the market is down, prices usually go up.
Savings accounts are a safe place to keep your money because all deposits made by consumers are guaranteed by the Federal Deposit Insurance Corporation (FDIC) for bank accounts or the National Credit Union Administration (NCUA) for credit union accounts.
The good news is your money is protected as long as your bank is federally insured (FDIC). The FDIC is an independent agency created by Congress in 1933 in response to the many bank failures during the Great Depression.
In short, it is better to keep your money in the bank than at home. For one, banks carry insurance, which allows you to recuperate your money in the event of fraudulent withdrawals or charges.
When a bank fails, the FDIC reimburses account holders with cash from the deposit insurance fund. The FDIC insures accounts up to $250,000, per account holder, per institution. Individual Retirement Accounts are insured separately up to the same per bank, per institution limit.
“If for any reason your bank were to fail, the government takes it over (banks do not go into bankruptcy). ... “Generally the FDIC tries to first find another bank to buy the failed bank (or at least its accounts) and your money automatically moves to the other bank (just like if they'd merged).
Most banks will deposit the majority of their reserve funds with their local Federal Reserve Bank, since they can make at least a nominal amount of interest on these deposits. Banks tend to keep only enough cash in the vault to meet their anticipated transaction needs.
Citibank and Bank of America offer the most protection for their customers, each providing three additional dimensions of security.
Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.
Millionaires put their money in a variety of places, including their primary residence, mutual funds, stocks and retirement accounts. Millionaires focus on putting their money where it is going to grow. They are careful not to invest large sums into items that will depreciate.
Yes, it's rare, but they have and it could happen. The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that exists to protect eligible deposits to member financial institutions against their failure. ... These were stressful times, but CDIC was there to protect Canadians.
Banks use your money to make money
Each time you make a deposit, your bank essentially borrows some of that money from your account and lends it out to other borrowers, whether it's an auto or home loan, a personal loan, or credit.