Unusual Investments That Make Sense In A Recession
Have a little extra cash and can’t decide whether to jump into the stock market or not? There’s no guarantee the stock market will continue to climb, and even so, some companies may be doing better than others in this recession. In the past, like during the Great Depression, some types of investments that we consider “unusual” were the best ways to safeguard monies. Today, we might want to take a little wisdom from the Greatest Generation, but also use this knowledge to include them in our favorite stock picks too.
The Midas Touch
People flocked to gold during the Great Depression as a metal that had intrinsic value, unlike fiat currency. The same is true now, with investors betting heavily that gold will increase if we hit a period of inflation, which is possible. Gold is attractively priced, having recently dipped, but it can rise just as quickly. Many people like the feel of gold in their hands, and think it is more liquid than paper currency or stocks. This may or may not be true, depending on who you know and in what form you bought the gold.
Today we see a recurrence of this “gold fever” with people in California trying to prospect for gold again, now that the recession has hit. It’s probably easier to get a return on your investment of time and hard work by buying gold mine stocks and/or gold bullion and coins. Some investment companies even allow you to move some of your holdings in an IRA to a gold-based IRA.
Green Acres
Homesteading is coming back in full force, except that people are doing it in the city. That’s right, many people are taking money and investing it in farm land, by converting their bare urban lots in to miniature working farms. With the recent shock in food prices, when gas went to $4/gallon, the idea of converting land from city landscaping to a way to sustain one’s self makes a whole lot of sense. During the Great Depression many people had “survival gardens” that they used to make it through the tough times. When they asked themselves, “How to survive the depression?” the answer was clear: grow food. It may not be as bad now, but gardening stores are having a tough time keeping up with demand for fruit trees, vegetables, and other needs for home gardens. Once a garden is established, it can pay back the owner in better produce and less cost, and provide some peace of mind that it is money well spent.
Energy Retrofitting
Anything with energy is hot right now. Gasoline might be at a little over $2 a gallon in most of the country, but the extreme stress of $3 or $4/gallon gas hasn’t gone away. To reduce the country’s dependence on foreign oil, the Obama administration has made it a priority to provide stimulus money for green jobs and energy retrofitting. Whether you’re thinking of getting stock in a biofuel company or simply replacing your roof, it is an investment that is going to pay off almost immediately, in some cases.
Homeowners, for instance, can now upgrade many of their energy systems at home and get rebates from the state and federal government that can be up to 30% of the cost of the system. Even appliances will be having their own “cash for clunker” program that will make appliance store stocks go up temporarily. An astute homeowner or investor with a little extra money to spare would do well to take the government up on their offer.
This entry was posted on Tuesday, September 15th, 2009 at 2:00 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
