Assets To Invest In When There Is A Downturn In The Market

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When you are worried about a downward turn in the market, you may want to consider changing some of your investments and opting for safer ones to protect your investment. You can opt for various ones that traditionally do well when the market takes a downward turn, which may suit your investment portfolio. Below are some investments that usually do pretty well when all others around them are dropping, and you may want to consider adding them to your investment portfolio until things start to pick up again.

Government Bonds

When it comes to a downward market, consider the excellent investment of government bonds. These often get overlooked in a bull market, as they often do not give very high returns. People usually opt for more lucrative investments when there is optimism in the market. However, they often perform well during downturns when there is a bear market. An example of this is in 2008, during the financial crisis, when the bonds returned a 12% increase on investment, making investors in them very happy.

Gold

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Gold is another investment that people may ignore when the market is doing well and turn to it when it goes down. Gold has long been considered an excellent hedge against inflation. Although it does not usually offer massive returns, they are generally higher than inflation, making them a worthwhile investment. Learn about the gold bar prices Brisbane investors go for. You will get to see the current prices and be able to compare them with historical prices. You will see that it can give good returns, especially when you are investing for the long term.

Managed Futures

Managed futures are another type of investment that usually does considerably better than others when the market takes a downturn. These are investments in the futures markets managed by people other than the fund owner, and they can be lucrative and show decent returns. However, managed futures often do not do well when the market is highly volatile and goes up and down, but over the long-term, they tend to average out and offer investors a return on their investment that makes it worthwhile. During the financial crisis of 2008, managed futures gave a return of 14%, which not too many investors would have grumbled about receiving.

Cash

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Something else that you can do when the market takes a downward tumble that will protect your money – albeit you will not see a return on it – is liquefy it into cash. Sell off your stock and shares and other assets that are proving volatile. Liquefy your assets and store them in a bank. Ensure that you do not exceed the protected limit of your bank in case they go bust, so your deposit is guaranteed and protected. Wait things out until the markets are looking more favourable. You will then have the cash to invest how you see fit and will hopefully make a decent profit in the future. Although you will not be earning money, you will also not be losing any, so it is an option to consider.

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