How to Recession Proof your Nest Egg

It is very difficult these days to know what to do with any savings. With food and fuel rising almost every day can we keep an edge on inflation with our nest egg?

Since the credit crunch the world recession seems to hang on stubbornly regardless of what the politicians have to say. The outlook is also quite bleak with growing concerns over the state of the Euro Zone. Regardless whether we are in the Euro Zone or not the future of the Euro currency will affect every one of us. If Greece should pull out of the single currency it will have a drastic effect on the rest of the world whether they trade with Greece or not.

What does this mean for the dollar or pound in our pocket? Well in the short to medium term it is not good for our savings. The stock markets are bumping along the bottom, and banks are artificially keeping the interest rates down.

The worst place you can keep your nest egg is in a simple standard savings account which may only give a return of two percent if you are lucky. Two percent will not keep pace with inflation and your money will slowly erode away.

There are some better deals around where you’ll need to tie up your money for a year or longer. Some of these schemes will pay up to four or more percent annual interest. These schemes might just keep a hedge on inflation only.

If you have a substantial sum you might try investing in ‘blue chip’ shares which could give a reasonable return on the share price and bi-annual dividends. In these times you’ll need to choose a solid company which pays dividends; not all do. Also bear in mind once the banks were once considered the safest shares to own. Hedge funds and futures are for the serious investor and not for the novice and faint hearted. The maxim to abide by is only investing money in shares you can afford to lose comfortably.

Gold and silver have been rocketing in price since the credit crunch. Indeed most metals have seen an increase in value even lead! However, what to watch for here if you are considering investing in gold is how much longer can the price of gold keep rising? When eventually the bubble does burst the price of gold will plummet overnight. However, it is fair to say for the time being gold is a safe haven in these uncertain times and not affected by currency changes or devaluation.