How Do You Invest if the Market Tanks? Wall Street’s Best Kept Secret

I remember watching the business channels during the financial crisis. One anchor says, “Everything is falling. No one is making money.  There are no investments that make money when the market is this bad.”

The reality with his statement is that it is just not true

Yes there were people losing money right and left.  Yet, there were ways to make money during the financial crisis.  You just had to be invested for it.

Virtually all investment strategies invest for growth.  That works great unless the stock market is declining.  Yes stocks and bonds work well as long as the market goes up. Those are your Plan A investments. 

Wouldn’t it make sense to bring in Plan B investments when Plan A is not working?

What are plan B investments?  Every investor should know that there are 3 main types of investments and not just 2.  Everyone knows about stock and bond investments.  However, there is a third category of investments that if used correctly can really work well when the market is tanking. 

Alternative Investments…

Alternative investments are intended to do the opposite of the stock market.  If everything was going down in portfolio, wouldn’t you want something going up?  Fortunately, these types of investments are not exclusive and available only to the wealthy. Anyone can invest in them. They are the best kept secret on Wall Street.  In fact, there is a whole category of alternative investment based mutual funds.

One word of caution – These funds have to be used correctly and must be managed from someone who has experience using them.  Just like anything else, gains are not guaranteed. Further, to make it even trickier, there are mutual funds that call themselves alternative investment funds and they are far from it.  You need a trained eye to identify which ones are prudent. 

In my own practice, alternative investments are a big part of my investment strategy. If your financial advisor or investment manager still lives in a 2 category investment world, I would love to talk with you about my beliefs about investing.  I am always looking to bring on new clients.  Simply call me at 972-386-0384 or email me at bob@prudentmoney.com.

Today, we live in a risky world where Plan A is just not enough! 

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