A safe asset to consider during an economic downturn

Mondo Finance Updated on 2024-02-01

In the ** of station b, I talked about risk aversion during the economic downturn. Someone asked me what other safe-haven assets I had besides **. In this issue, I will talk about my understanding in detail and provide you with some ideas. First of all, no asset is truly safe. Any asset has its advantages and disadvantages.

In general, these are some of the safe assets that are safe during a recession. First, **and others*** are often considered "safe haven" assets in times of economic uncertainty. This is because their value usually remains stable or grows during recessions. At the same time, they can often be used to barter, increasing flexibility in turnaround in difficult times.

Second, hold cash and cash equivalents. During a recession, it is wise to hold a certain amount of cash or cash equivalents, such as short-term** bonds, as this can provide some flexibility and security.

Third, living materials. Subsistence is not an asset in the traditional sense. There is a time when grain expires, and there is also a time when the tools of production are broken. And if the economy is good, old food and tools are of no value at all. Others will only buy newly produced food and production tools. However, after entering the recession, these become very precious. Food and production tools are things that allow people to survive directly. With this, a person or a family can live well even when they are cut off or reduced from social contact. In the economic upswing, this is a complete negative equity, but in the economic slowdown, daily necessities will be a good reserve target.

At the same time, it seems to me that there are some so-called insurance assets that do not apply to the current situation.

First, bonds. During a recession, bond yields typically rise as investors seek relative safety to invest in. However, the central bank has no intention of raising interest rates at all, so the yield on bond purchases is very bad. At the same time, bonds themselves are still slightly riskier than deposits, so it may not be appropriate to spend a lot of money on bonds at the moment.

Second, real estate. If the real estate is high, there is no need to buy any other property except for the housing you just need.

Third, consumer necessities**. Products made by these companies, such as food, beverages, and personal care products, are still in demand during a recession. However, it is better to buy these than to stock up on the products they produce. After all, there is always an end to recession.

Faith is as precious as gold. I hope you are confident in yourself and your family.

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