 TITLE: Should You Invest During a Recession? CONTENT: The Risks of Investing During a Recession\n-----------------------------------------\nAs mentioned, choosing whether to invest during a recession should depend on whether you can really afford to do it and how much risk tolerance you have.\nFirst, think carefully and in detail about your financial situation. Do you have enough money saved in an emergency fund? Would dedicating money to an investment harm your ability to cover household expenses or pay your debts? Leaving yourself in a financial bind is rarely worth the possible rewards of investing in the stock market.\nAlso keep in mind that it's hard to time the market, even for professional investors. Choosing a single moment to invest your money is essentially a guess. And if you guess wrong and then need to pull your money out of the market to meet everyday financial needs, you could end up with a small fraction of your original investment.\nHere are good ways to minimize risk when investing in the stock market:\n*   **Diversify your portfolio.** Simply put, this translates to not putting all your eggs in one basket. For instance, you likely would want to avoid spending every one of your investment-designated dollars on a single stock. Instead, you might split your money among several stocks or, even safer, a few mutual funds. Diversification is designed to offset losses from some investments with gains from others. It won't necessarily shield you from all losses, but it could cushion the financial blow.\n*   **Invest in index funds.** Rather than trying to hit a bull's-eye with purchases of individual stocks, investing in an index fund lets you pick a group of stocks or bonds tied to a market index. These indexes include the Dow Jones Industrial Average and the S&P 500. Index funds tend to be lower-risk options for investing, since they normally enjoy balanced long-term growth and they spread your risk over a variety of stocks and bonds. END