{"id":43977,"date":"2020-06-19T16:54:34","date_gmt":"2020-06-19T08:54:34","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=43977"},"modified":"2020-06-19T16:54:34","modified_gmt":"2020-06-19T08:54:34","slug":"invest-economic-downturn","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn","title":{"rendered":"Why Should You Invest In An Economic Downturn"},"content":{"rendered":"<p>The markets are weak, unemployment is on the rise, and investor confidence is at an all-time low. It\u2019s an economic downturn that could inevitably lead to a recession.<\/p>\n<p>So why are we talking about investing in a time like this?<\/p>\n<p>Simply put, weakening markets are not all a bad thing. It could hold potential profits for those who are willing to bide their time.<\/p>\n<p>However, there are a few important questions you need to ask yourself before you dive into investing now.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Can-you-afford-it\"><\/span>Can you afford it?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Before we even begin to consider the recession as an investment opportunity, it is important for you to figure out if you can spare the financial resources. While this could potentially lead to long term gains, there are still substantial risks involved.<\/p>\n<p>In other words, you need to make sure that your finances are able to shoulder any potential losses. Ensure that you:<\/p>\n<ul>\n<li>Have at least six months\u2019 worth of emergency savings<\/li>\n<li>Have an income that can cover your monthly expenses and commitments<\/li>\n<li>Can commit these funds to investments for more than five years<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What-are-market-conditions-like\"><\/span>What are market conditions like?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A recession is defined by two quarters of negative GDP growth. The good news is that Malaysia is <a href=\"https:\/\/www.imoney.my\/articles\/health-crisis-recession\" target=\"_blank\" rel=\"noopener noreferrer\">not yet in a recession<\/a>. There was positive economic growth before the start of the pandemic-induced movement control order, and we\u2019re looking at some sort of recovery by the end of the year.<\/p>\n<p>However, the last three months of economic uncertainty have wreaked havoc on the stock markets. So while we\u2019re not yet in a recession, it feels like one is looming up ahead &#8211; which is all that needs to happen to drive stock prices down.<\/p>\n<p>At the time of writing, the KLSE Composite Index is at a five-year low &#8211; and this is after recovering from a massive slump in January 2020. It has also been showing a downward trend since the middle of 2018.<\/p>\n<p>In fact, <a href=\"https:\/\/www.forbes.com\/sites\/cameronkeng\/2018\/10\/23\/recession-is-overdue-by-4-5-years-heres-how-to-prepare\/#4089c4ac40d8\" target=\"_blank\" rel=\"noopener noreferrer\">Forbes<\/a> was of the opinion that the US is 4.5 years overdue for a recession in 2018. As history has shown, when the United States of America experiences economic problems, so does everyone else.<\/p>\n<p>As such, it doesn\u2019t look good for the short-term global economy.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"So-why-invest-now\"><\/span>So why invest now?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The economic cycle goes through four stages: expansion, peak, contraction, and trough.<\/p>\n<p>Expansion is when the economy grows, and employment rises. The peak is when everything is running at economic output is at its maximum and there is noticeable upward pressure on prices. This leads to a contraction as the market corrects itself with reduced output and increased unemployment. Finally, the trough is the lowest level of possible contraction and the economy begins the cycle once again.<\/p>\n<p>What goes down, tends to come up again. At least as far as the economy as a whole goes. Your mileage may vary for individual investments.<\/p>\n<p>Investors that can afford it look at economic downturns and market dips as stocks going on sale; taking the opportunity to make long term investments.<\/p>\n<p>This is the reasoning behind the popular quote from Warren Buffet, \u201cbe fearful when others are greedy and greedy when others are fearful\u201d. A greedy market drives prices up and is a sign that the economy is reaching its peak. On the other hand, fearful investors are a sign that stock prices are dropping.<\/p>\n<p>Knowing that the economy recovers, then it is perhaps a good idea for the brave investor to buy into industries that can survive the downturn and eventually ride out the turmoil into the expansion part of the cycle.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is-this-for-you\"><\/span>Is this for you?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Making an investment during a recession is not for the weak of heart, especially if you are the type to obsessively check your portfolio. There is no way to tell when an economic contraction will end. Nor is there a way to tell if you\u2019re in the trough.<\/p>\n<p>It will not do your blood pressure any good to watch your investments shrink in the short term while you wait out the recession.<\/p>\n<p>These economic cycles run for about 10 years or so. Malaysia experienced financial downturns in 1997, 2008, and our current downturn began in 2019. With this cycle, we can anticipate that anything you do now will be to prepare for the next peak in the economic cycle.<\/p>\n<p>It is also important to note that overall, the next trough is not as low as the previous cycle. You will still come out ahead as long as you focus on the very long term. So prepare yourself to do your homework on the industries that will recover the fastest, and prepare to sit on the investment for several decades.<\/p>\n<p><strong>Read More:<\/strong><br \/>\n<a href=\"https:\/\/www.imoney.my\/articles\/covid-19-recession-invest\" target=\"_blank\" rel=\"noopener noreferrer\">COVID-19 Recession: Should You Invest Now?<\/a><br \/>\n<a href=\"https:\/\/www.imoney.my\/articles\/managing-money-economic-downturn\" target=\"_blank\" rel=\"noopener noreferrer\">8 Steps To Manage Your Money During COVID-19<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is not for the weak of heart, or the impatient.<\/p>\n","protected":false},"author":36,"featured_media":43979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-43977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Should You Start Investing During A Recession?<\/title>\n<meta name=\"description\" content=\"Investing in this climate offers great opportunities as well as risks. Here&#039;s what you need to know before you decide.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.imoney.my\/articles\/invest-economic-downturn\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Should You Start Investing During A Recession?\" \/>\n<meta property=\"og:description\" content=\"Investing in this climate offers great opportunities as well as risks. Here&#039;s what you need to know before you decide.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.imoney.my\/articles\/invest-economic-downturn\" \/>\n<meta property=\"og:site_name\" content=\"iMoney Malaysia\" \/>\n<meta property=\"article:published_time\" content=\"2020-06-19T08:54:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/06\/19165239\/black-and-white-stock-market-watermark.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"672\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Farhan Gazi\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Farhan Gazi\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn\"},\"author\":{\"name\":\"Farhan Gazi\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/#\\\/schema\\\/person\\\/2dbdc36280d0c8fd0c1ba69091f9efb6\"},\"headline\":\"Why Should You Invest In An Economic Downturn\",\"datePublished\":\"2020-06-19T08:54:34+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn\"},\"wordCount\":794,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/static.imoney.my\\\/articles\\\/wp-content\\\/uploads\\\/2020\\\/06\\\/19164735\\\/black-and-white-stock-market.jpg\",\"articleSection\":[\"Investment\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn\",\"url\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn\",\"name\":\"Should You Start Investing During A Recession?\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/static.imoney.my\\\/articles\\\/wp-content\\\/uploads\\\/2020\\\/06\\\/19164735\\\/black-and-white-stock-market.jpg\",\"datePublished\":\"2020-06-19T08:54:34+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/#\\\/schema\\\/person\\\/2dbdc36280d0c8fd0c1ba69091f9efb6\"},\"description\":\"Investing in this climate offers great opportunities as well as risks. Here's what you need to know before you decide.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#primaryimage\",\"url\":\"https:\\\/\\\/static.imoney.my\\\/articles\\\/wp-content\\\/uploads\\\/2020\\\/06\\\/19164735\\\/black-and-white-stock-market.jpg\",\"contentUrl\":\"https:\\\/\\\/static.imoney.my\\\/articles\\\/wp-content\\\/uploads\\\/2020\\\/06\\\/19164735\\\/black-and-white-stock-market.jpg\",\"width\":1280,\"height\":853},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/invest-economic-downturn#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Investment\",\"item\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/category\\\/investment\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Why Should You Invest In An Economic Downturn\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/#website\",\"url\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/\",\"name\":\"iMoney Malaysia\",\"description\":\"Everything you need to know about improving your personal finances.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/#\\\/schema\\\/person\\\/2dbdc36280d0c8fd0c1ba69091f9efb6\",\"name\":\"Farhan Gazi\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/3643131efd9f1208fcd2e9facf9e9c03fc3d1a422d5fb3e9cabd4b71609f5d96?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/3643131efd9f1208fcd2e9facf9e9c03fc3d1a422d5fb3e9cabd4b71609f5d96?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/3643131efd9f1208fcd2e9facf9e9c03fc3d1a422d5fb3e9cabd4b71609f5d96?s=96&d=mm&r=g\",\"caption\":\"Farhan Gazi\"},\"description\":\"A former tech journalist, Farhan sees the importance of technology in the future of finance. In his free time, he stops looking forward in time and enjoys exploring historical European martial arts.\",\"sameAs\":[\"https:\\\/\\\/www.imoney.my\"],\"url\":\"https:\\\/\\\/www.imoney.my\\\/articles\\\/author\\\/farhan-gazi\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Should You Start Investing During A Recession?","description":"Investing in this climate offers great opportunities as well as risks. Here's what you need to know before you decide.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn","og_locale":"en_US","og_type":"article","og_title":"Should You Start Investing During A Recession?","og_description":"Investing in this climate offers great opportunities as well as risks. Here's what you need to know before you decide.","og_url":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn","og_site_name":"iMoney Malaysia","article_published_time":"2020-06-19T08:54:34+00:00","og_image":[{"width":1280,"height":672,"url":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/06\/19165239\/black-and-white-stock-market-watermark.jpg","type":"image\/jpeg"}],"author":"Farhan Gazi","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Farhan Gazi","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#article","isPartOf":{"@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn"},"author":{"name":"Farhan Gazi","@id":"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dbdc36280d0c8fd0c1ba69091f9efb6"},"headline":"Why Should You Invest In An Economic Downturn","datePublished":"2020-06-19T08:54:34+00:00","mainEntityOfPage":{"@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn"},"wordCount":794,"commentCount":0,"image":{"@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#primaryimage"},"thumbnailUrl":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/06\/19164735\/black-and-white-stock-market.jpg","articleSection":["Investment"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.imoney.my\/articles\/invest-economic-downturn#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn","url":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn","name":"Should You Start Investing During A Recession?","isPartOf":{"@id":"https:\/\/www.imoney.my\/articles\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#primaryimage"},"image":{"@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#primaryimage"},"thumbnailUrl":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/06\/19164735\/black-and-white-stock-market.jpg","datePublished":"2020-06-19T08:54:34+00:00","author":{"@id":"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dbdc36280d0c8fd0c1ba69091f9efb6"},"description":"Investing in this climate offers great opportunities as well as risks. Here's what you need to know before you decide.","breadcrumb":{"@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.imoney.my\/articles\/invest-economic-downturn"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#primaryimage","url":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/06\/19164735\/black-and-white-stock-market.jpg","contentUrl":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/06\/19164735\/black-and-white-stock-market.jpg","width":1280,"height":853},{"@type":"BreadcrumbList","@id":"https:\/\/www.imoney.my\/articles\/invest-economic-downturn#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.imoney.my\/articles\/"},{"@type":"ListItem","position":2,"name":"Investment","item":"https:\/\/www.imoney.my\/articles\/category\/investment"},{"@type":"ListItem","position":3,"name":"Why Should You Invest In An Economic Downturn"}]},{"@type":"WebSite","@id":"https:\/\/www.imoney.my\/articles\/#website","url":"https:\/\/www.imoney.my\/articles\/","name":"iMoney Malaysia","description":"Everything you need to know about improving your personal finances.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.imoney.my\/articles\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dbdc36280d0c8fd0c1ba69091f9efb6","name":"Farhan Gazi","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/3643131efd9f1208fcd2e9facf9e9c03fc3d1a422d5fb3e9cabd4b71609f5d96?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/3643131efd9f1208fcd2e9facf9e9c03fc3d1a422d5fb3e9cabd4b71609f5d96?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/3643131efd9f1208fcd2e9facf9e9c03fc3d1a422d5fb3e9cabd4b71609f5d96?s=96&d=mm&r=g","caption":"Farhan Gazi"},"description":"A former tech journalist, Farhan sees the importance of technology in the future of finance. In his free time, he stops looking forward in time and enjoys exploring historical European martial arts.","sameAs":["https:\/\/www.imoney.my"],"url":"https:\/\/www.imoney.my\/articles\/author\/farhan-gazi"}]}},"_links":{"self":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts\/43977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/comments?post=43977"}],"version-history":[{"count":1,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts\/43977\/revisions"}],"predecessor-version":[{"id":43981,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts\/43977\/revisions\/43981"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/media\/43979"}],"wp:attachment":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/media?parent=43977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/categories?post=43977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/tags?post=43977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}