Extension Report

Baldwin County Extension Office

302A Byrne Street

Bay Minette, AL  36507

Telephone (251) 937-7176 or

928-0860/943-5061 ext. 2222

FAX (251) 937-7285

Rick Zapata

Regional Extension Agent

Consumer Science & Personal Financial Management

June 14, 2011

Investing During Uncertain Times

At almost every workshop that I teach, I’m getting questions about personal investments so I thought that this might be a good time to answer most of those questions.

The best two ways to look at investments are to consider your risk level and whether or not the investment is insured. As a general rule, the older the investor the less risk that they may want to take with their investments. Most people that are approaching retirement age will want to take less risk, however, less risk usually translates into less profits.

In recessions and depressions, people still make money because some assets will continue to increase in value. One of those assets that will usually not lose value is land. Real estate is usually a good investment if the real estate is rental property that can be purchased below appraisal. During this recession, a lot of property has been foreclosed and there are some bargains available for those who want to be landlords. More and more people are moving from being home owners to home renters during this recession.

The investments that are insured are the best investments for those who want the least risk. Most of these investment products will be offered by a bank or credit union. During times of inflation, these products pay pretty well, but during times of deflation these products do not pay very much at all. There is a lot of competition between banks and credit unions right now, so now is a good time to sit down with your bank or credit union manager and see what they have to offer that will be insured and provide the least risk.

If you have money that you would want to put in a risk category, there are hundreds of funds that you can invest in. Please sit with a certified financial planner to determine where you can place your funds where the return will meet your investment needs. Your personal banker is an excellent source of information and the internet is an excellent source of information on investments. Please be aware that there are scam artists out that will get you to invest in a ponzi scheme if you are not on your guard. As a general rule, if it sounds too good to be true, it is because it is not true.

Phone: 937-7176 or 943-5061, 928-0860, ext. 2222

Baldwin County Extension Programs are supported by the Baldwin County Commission.

The Alabama Cooperative Extension System (Alabama A&M and Auburn Universities) in cooperation with the U.S. Department of Agriculture is an equal opportunity educator and employer.