Cash Conversion

• During recessions, people tend to spend less. This occurs because jobs and salaries begin to decline or become stagnant. People are more inclined to save money and are leery about making investments. This is caused by a decrease in consumer confidence.
  
  There are cases where a person must sell off their investments because a bad economy has diminished or eliminated their income. People that are invested in stocks may sell them to financially cope with the recession. When this occurs, the increased sell-off of stocks causes the stock market to tumble. During a recession, the temptation to convert investments to cash is strong. However, according to the website Young Money, disciplined investors should not prematurely convert to cash without considering all their investment options.
  
  

Bonds and Metals

• According to the website Smart Money, investors should consider bond funds as a place to invest. Harold Evensky, a financial planner, recommends investing money in investment-grade corporate bond funds, rather than U.S. treasuries. Bonds have an attractive average yield and pose less risk than stocks. However, bonds do have a higher risk than investing in U.S. treasuries.
  
  NuWire Investor recommends precious metals as a smart recession investment. Precious metals such as silver, gold and platinum are an excellent investment for those that want to get out the stock market. Over the years, precious metals have acted as a currency hedge. During recessions, gold in particular rises as investors fear inflation and future turmoil in the financial markets. Although precious metals are a good investment, investors must realize that precious metals are also subject to market swings.
  
  

Real Estate

• Individuals who decide to invest in real estate during an economic recession must view real estate investments differently. In times of financial uncertainty, real estate must be viewed with a focus on cash flow rather than appreciation. In this case, the commercial or residential real estate must be able to rent or lease with a good cash flow.
  
  

Considerations

• When investing during a recession individuals should seek guidance from multiple professional sources. Before the stock market fall of September 2008, some financial experts urged investors to pour money into companies that completely collapsed shortly thereafter. All investments carry a risk, so making an informed decision is extremely important.