Is It Safe to Invest During a Recession?

wealthdart.com Rahul Paragi

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Investing During a Recession Can Be a Good Idea but Only Under the Following Circumstances

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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.

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If You’re There and Have Extra Money at Your Disposal, You Can Feel Free to Invest It. If Not, Be Sure to Build a Solid Emergency Fund First.

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You’re Not Planning to Touch Your Portfolio for at Least Seven Years.

Investing During a Recession Isn’t for the Faint of Heart. You May Think You’re Buying at a Low, Only to See Your Portfolio Value Decline a Few Days Later.

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The Best Way to Avoid Losses in a Recession -- And Come Out Ahead -- Is to Take a Long-Term Approach to Investing. Plan On Leaving Your Money Alone for at Least Seven Years.

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You’re Not Going to Obsessively Check Your Portfolio.

When the Economy Is in Bad Shape and There’s Lots of Stock Market Movement, You May Be More Inclined to Log on to Your Brokerage Account Every Day and See How Your Portfolio Is Doing.

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But, if You’re Going to Invest During a Recession, You Simply Can’t Do That. The More You Check Up on Your Investments, the More Likely You Are to Panic.

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ND, When You Panic, You Risk Making Rash Decisions, Such as Unloading Poorly Performing Stocks, That Force You to Lock in Losses.

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Once you've gotten the basics and foundation down, there's no limit to what you can build.

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