Making money during a recession? – Part 1

RecessionWhen people think of a recession, they start to think the worst. Thinking that losing their money is a catastrophe, but there are many ways to secure your money and actually make some money in a recession.

Recessions are not like depressions, a recession effects less people and those people generally belong to a specific group of industry.

The ripple effect makes the recessionary period seem longer than it actually is. So recessions are nothing that should be ignored or overlooked. Recessions cost people their jobs and are the reason for some people to lose all their money. You should adapt to the changes that the recession may have on your income and you should be just fine.

Knowing how the market behaves is a must.

First you must know the basics of how the market behaves in order to know where and how best to make money during a recession. Like we said earlier, there are market segments that are effected more than others.

When the time of recession is upon the market three things happen to it.

First, the stock market clearly reflects that household expenditures are being reduced.  Stock prices go down when people spend less money and the companies make less money.

The second market sign of recession is the lack of product demand, that leads to a decrease in the company inventory. When the inventory is smaller the employees needed are fewer. This leads to unemployment rates increase because unnecessary workers are laid off.

And the third sign of a market in a recession is the general decrease in wages, which results from the fact that work has become harder to find. And when people male less money, they tend to spend less money and the cycle repeats.

 

See PART 2.

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