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Ideas for asset and real estate investment in challenging times

by | Apr 10, 2020 | Real Estate Practice

For investors and prospective investors in Pittsburgh, the financial effects of the global pandemic can present both concern and opportunity. It is wise to be attentive and think about risks. A key aspect of investing, regardless of the environment, is to be fully prepared and have a comprehensive plan.

There are certain factors to consider when investing during troubling times. When there is a recession, it may be better to focus on low-risk investments. Safety should come first. This means the investor should shun an investment heavy on speculation and leveraging. If the company has solid cash flow and small debt, it is likely a good investment. For equities, an investor should focus on items that people need every day. That could be toiletries, food, cleaning supplies and anything that is used consistently and without fail.

Certain industries are historically recession-proof. These are items that do not reach the “essential” level but are nonetheless important. That includes industries that are categorized as non-cyclical. Funeral homes are an example. Furthermore, being diversified is generally a sound strategy. People may not want to invest in a single area. Separating investments between equities, commodities and other asset classes can be useful.

Regardless of the national landscape, real estate is usually safe. During tough times, it may be easier to buy real estate and profit from it due to reduced prices. Investing in dividend stocks could provide a safe return too. After the purchase, the investor will receive a portion of the company’s earnings. With this, the company should have a solid ratio of debt-to-equity. Also, it may be preferable for the company to have had a good run of success in paying dividends for a minimum of 25 years.

When investing, it may also be a good idea to have legal advice. A law firm that understands real estate investment and other areas of investing might be helpful.