VIAC

ViacomCBS Inc.

29.58
USD
-17.81%
29.58
USD
-17.81%
27.84 101.97
52 weeks
52 weeks

Mkt Cap 17.95B

Shares Out 606.71M

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A Recession Won't Change My Investing Strategy. Here's Why

An impending recession is the worst nightmare of a lot of investors. But honestly, I'm not too worried about it. That doesn't mean I like losing money -- far from it. But I feel confident in my investing strategy, and I trust it can carry me through. Here's why. Ups and downs are a natural part of investing Even the most profitable stocks have had their ups and downs over the years. Most of the time, they eventually rebound. But this can take months or even years. It's tempting to try to sell quickly when you see share prices plummeting to prevent further losses. But often, this just turns a temporary loss into a permanent one. Had you just held on to the stock and waited for the share price to come back up, you could've regained all you lost and then some. Often, the best thing to do in these situations is nothing. Trust that you've invested well, and give your portfolio the time it needs to recover. This isn't too difficult for me because most of my savings is invested in retirement accounts I can't easily access until I turn 59 1/2. Since I don't plan to spend that money for a while, daily or even monthly price fluctuations don't bother me as much. What I'm doing to prepare for a potential recession Keeping a long-term focus is definitely an important aspect of my investing strategy. As part of that, I don't invest my emergency fund or money I expect to use in the next five years or so. This way, I won't be forced to sell off my investments at an inopportune time just because I have to pay a bill. I also do my best to keep my investments diversified, rather than sinking all my money into a couple of stocks. This won't prevent me from losing money in a recession, but it can help make the loss less painful. When all your money is in a single stock, you need it to do well in order to make a profit. But if you have 100 stocks, one or two doing poorly won't affect you as much. Chances are, you'll have a few others that are doing well at the same time. Index funds are a simple way for investors of all skill levels to diversify their savings with a single purchase. These give you part ownership in hundreds of companies, and they're also one of the most affordable investments around. Keeping your costs down is smart, especially when preparing for a recession, because then you won't have to worry about being gouged by fees and losing money on your investments at the same time. You have to decide what's right for you It's pretty easy for me to be calm about my investments when I don't plan to spend the money anytime soon. If I were on the brink of retirement, I might feel a little differently. In that case, I might move more of my money into safer investments, like bonds. But even then, I wouldn't pull all my savings out of stocks. The earning potential is just too great to ignore, even with the risk of loss. Ultimately, when it's your money, what you do with it is your decision. But I suggest you make a plan now. Taking steps to diversify your savings and anticipate how you'll handle a recession will give you more confidence when you have to face one. 10 stocks we like better than Walmart When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys. Stock Advisor returns as of 2/14/21 The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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