Tuesday, August 16, 2016

It's a new investment environment time today. But many people still don't understand this. Instead they are wondering how long this slow economic growth will last. But what if we can use this situation and get additional bonuses out of it? What if this slow economic recovery is a great opportunity to invest and get constant profit during the next decade or two? By the way, many successful investors say the best time to invest is stagnation period. Why? First, each stagnation period sooner or later will be replaced by economic growth. Second, you can buy stocks at the best prices during economic stagnation. So use these benefits during today's economic recovery period. But how to do this? Let's consider some important points from the recent McKinsey Global Institute report.

The recent McKinsey report suggests that investors from the US and Europe have to lower their future returns expectations. Today's situation on financial markets is rather a rule than an exception. If you follow the rules you will get stable returns. Yes, these returns will be lower then before but stable enough to let your business survive and even prosper.

McKinsey Global Institute is an established organization specializing in global economy research. Its reports are widely used by those involved in financial transactions all over the world.
The McKinsey report mentioned above describes two possible scenarios for the next 30 years: slow economic growth scenario with returns on investments about 4-5%, and more optimistic recovery scenarion with 5.5-6.5% equity returns.

So how to succeed in this new economic environment? Here are some advices on how to thrive and adapt.

1. If You Don't Invest You Don't Get Any Returns

Remember that even 1% returns are better than no returns at all. So don't be afraid to buy stocks. Moreover today you can buy pretty good stocks at low prices and get more return in the future. So today is a good time to invest your money.

2. Re-Evaluate Possible Risks 

In the earlier years maximizing risks meant increasing your returns. But now you should concentrate on diversifying and balancing your stock portfolio. This will help you to increase returns and recover from any possible market drops.

3. Concentrate On Defensive Stocks 

Buying stable stocks that are generally independent of down market cycles is also a good strategy in today's investment environment. Such stocks tend to outperform unstable business cycles.

4. Increase Your Savings 

It's too hard to beat cash reserves during down cycles. Increase your budget devoted to savings. Whatever extra cash you can save will help to survive and succeed in the future. The more savings you make today the more confident and powerful you business will be tomorrow.

The latest McKinsey report is not the truth in the first instance, but you should follow it and plan your investments accordingly. If you follow the rules then you are likely to succeed in a short perspective. Outperform your competitors and help your business to prosper by uderstanding and using all the resources available.

Author bio:
Denny Lunch is financial expert, insterested in investment, stock exchange and Stocksneural forecasting

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