In today’s economic climate, it can be difficult to keep faith in financial planning and investing very high. That’s because most people thinking about financial planning during a rough economy – first-time investors and veterans alike – all focus on how to salvage the ruins of their savings, and very little else. This is only natural, since the bulk of investments made five or ten years ago are reaching some of their lowest points.

However, smart investors also look at the positive side of a recession. More specifically, they look beyond the blows being dealt them by the stock market, the housing bubble, or other investments to all the ways in which they can use the recession to make some good choices for the future.

Getting through a Recession

Tough economic times, no matter how difficult they seem while they are going on, are nothing new. Despite media frenzies last year that compared the current recession to the Great Depression, the economy is nowhere near as dire as it was during the 1930s, nor as bad as the recession that hit in the early 1980s. In fact, if you look at the history of the U.S. economy, you’ll find at least one similar recession in every single decade for the past century.

This historical review will also show you that even when times have been tough, there are still people out there making money. That’s because the best kinds of investors regroup, reinvest, and watch as the cycle begins all over again – this time with their investments moving in a positive direction.

The trick to being successful during a low economic point is to have faith in the system as it currently stands. In fact, you may want to have enough faith to not only leave your investments where they are, but to consider investing even more. After all, stocks are cheaper, they’re more accessible, and all of history points to the economy eventually turning itself around and booming back up.

How to Invest Wisely and Safely

While this may seem counterintuitive, particularly if you’re struggling with unemployment or other losses right now, it’s important to talk with your financial advisor to make the most out of the economic crisis. Restructuring your current portfolio or even putting in whatever extra you can – no matter how small – can go a long way in giving you a much brighter future than what it seems you’re facing right now.

Only by being a proactive investor – the type who doesn’t see a loss of capital as a permanent loss, but one of the many glitches that will inevitably hit no matter how prepared you are – can you get past a recession with your head held high and great prospects for tomorrow.

Questions? Email me at and visit our website at New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning. Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

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