Financial Crisis & Trading on IqOption

Even though it is utterly hard to predict a financial crisis and even to identify the moment it starts, you may still be ready for it and make a backup plan. Economic cycles make it simpler to forecast a coming downturn but at the same time strengthen themselves. When people await a crisis, they will act respectively: play it safe and get the money out of the economy and that will give more chances for the downturn to occur. Nowadays the issue is that many people think that the crisis will anyway happen.

Robert Kiyosaki believes that the next financial crisis will be like an avalanche. Fred Harrison, the man who has successfully forecasted the financial crisis of 2008 three years before it actually happened, think that a recession is approaching. Amar Manzoor, who is an expert, believes in a coming recession as well. According to many experts, we don’t have too much time to prepare for the “next big thing”.

However, the question is how not to lose your money and possibly even get an advantage from the next economic crisis? In this article we collected 3 easy rules that may help you get through another crises that can happen to the economy.

Ensure that you have enough personal savings. Financial crises are commonly followed with high unemployment rate, low disposable income and overall inactivity. Everybody may have a chance of losing a job. Consequently, it is a good idea to start saving even from today. Try to save at least 6-month worth of your income.

Invest in yourself. Learn something new, get new skills, until it is too late to become a professional in a different sector. Even if the coming crisis will not touch you you, there is still a risk that your specific field of work may become outdated because of the distribution of new technologies (for example, artificial intelligence and robotics) or changing economic landscape (outsourcing to developing countries). Therefore, you have to work on yourself in order to be valuable for the society and build a great social network. Because people can help you out in tough times.

Two advices explained before will help you save money. Nevertheless, the third point one is about making even more on the declining market. Crisis is a time when you have to use value investing concept. Market psychology works in curious ways. People are too optimistic during the upturn and too depressed when there is a downturn to make finance related decisions. They buy when it is high and sell when it is low. Which is considered to be irrational. If you have enough skill and luck, a serious crisis may become a great opportunity to buy lower. Here is what several long-run traders do. They make a list of large companies with powerful foundation and high enough chances of surviving the crisis. What they do next is they wait for these companies to lose a significant share of the market value and make their move. It is attainable but not 100% guaranteed, that the companies will recover the lost value after several years.

If you think that everything will become too bad when the next recession will happen (like it was in 1929), you may think about buying gold and not currencies. This precious metal is always valuable.

If you follow these easy steps, you will have more chances than others to get through the next recession well.