How to Invest During a Recession

Human psychology does weird things. If someone tells you there is a half-off sale on your favorite food at the grocery store, you immediately go down to the grocery store and stock up on the item. However, if someone tells you that there is a half-off sale on your favorite mutual fund in the stock market, instead of going to the mutual fund store and buying more, you sell all that you have at the discount price. This, of course, makes no sense, but it is how human emotions work. Here's how to beat that.

	Disconnect yourself emotionally from your investments. Your investments are for the long term (more than 5 years in any case - if it's for less than 5 years, you should be saving, no investing). Put the money out of your head. Don't open statements if you know that seeing a loss will make you sell.
	Set up automatic investments every month or week. This way you don't have to think about your investments. Just let them go in.
	Look for mutual funds that have a long track record of doing really well (over 12% over the long run, and that are at least 10 years old, preferably 20 or 30 years old), but did very poorly in the last year. This means that a high-quality product went on sale! Invest in those mutual funds.
	Rejoice when the stock market drops because that is another chance to buy at a discount. Recessions are short, so enjoy your buying opportunities while you still have the chance!

• Don't sell! You don't actually lose money until you sell at a loss.
• Don't move conservative. Following trends means that you'll be there too late. Defy trends and follow good investments.