Financial planners say they see people make the same 3 investing mistakes over and over during recessions

Most first-time investors are hesitant to invest in accounting services.

Financial planners say investors typically make rash decisions out of fear during recessions.
Avoid investing in something trendy, like crypto, if you didn’t understand it before the recession.
Don’t sell everything out of fear without looking at your long-term goals.

An estimated 20 million Americans started investing in the stock market during the pandemic. That’s a lot of new investors experiencing a bear market — and potentially a recession — for the first time. 

It’s not an easy thing to grapple with, says financial planner Pamela Capalad of Brunch & Budget.”Recessions lead to a lot of potential desperation,” she says, which often means mistakes are made.

Nicole Morong, a financial planner at Peterkin Financial, agrees and adds, “There’s a lot of fear and people asking, ‘Is this the right time to invest? Should I be waiting for the market to go down more before I put more money in?'”

If you’re a new investor wondering how best to protect yourself from what may be a recession, Capalad and Morong have some advice.

1. Avoid investing in something you don’t understand

Capalad says she’s seen investors get into new, trendy investments during recessions, but that’s a mistake. “Avoid anything that you didn’t understand before the recession,” she says.

For example, if you didn’t know how cryptocurrency worked before, now might be a bad time to invest in crypto out of desperation. Capalad says, “Ultimately, it goes back to: Do you understand what you’re investing in? Do you understand why you’re investing in crypto? Do you understand how crypto works?”

“Crypto was one of the first things to take a dive when there was any hint of recession because crypto is currently all …read more

Source:: Businessinsider

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