Investing in a down economy - is it safe?

How to Find recession proof investments?

During an economic downturn, knowing where to stash your cash can be an issue of concern. Listening to the news and seeing the bank failures and the Wall Street crisis. Is there a safe place to invest your hard earned money?

Investors look toward inflation protected securities. This will insure that their money will not be affected no matter how the economy turns. One of the safest places to put your money according to the industry experts is U.S. Treasury inflation protected securities (TIPS), these securities pay interest every six months and return the principal when the security matures. The difference is that the coupon payments and underlying principal are automatically increased to compensate for inflation as measured by the consumer price index (CPI).

An additional advantage of the (TIPS) is that they protect against deflation, or a decline in the overall price level of goods and services, It guarantees the owner of the bond that at maturity the will earn either the inflation-adjusted principal or the par value whichever is greater.

More places to stash your cash

The federal government's www.savingsbonds.gov other inflation-protected security is the I Savings Bond which are 30 year bonds that allow your money to compound tax-deferred. Savings bonds are a safe, risk-free investment guaranteed by the United States There are several advantages to investing in U.S. Savings Bonds,

• receive tax benefits,
• inflation protection
• bonds for education

The different types of U.S. Savings Bonds are currently available:

Series EE Bonds

Electronic EE Bonds

Paper EE Bonds

Series I Bonds

Where to buy bonds:

• Purchasing from any Federal Reserve Bank or branch.
• Buying them through your bank -- in person or online.
• Through a payroll deduction plan at work
• Online through TreasuryDirect

Read more about US Savings Bonds at:

http://financialplan.about.com/od/savingmoney/a/SavingsBonds.htm

What about Money Market Mutual Funds ?

Money-market mutual funds, which can be purchased in both taxable and nontaxable is a place to put your money due to its primarily investing in corporate, government or municipal debt with maturities of less than 90 days, they're safe, secure and liquid.

Money market funds are essentially short-term mutual funds that invest in government securities, certificates of deposit, asset-backed commercial paper and other highly liquid securities. They are different from money market deposit accounts, which are offered to consumers by many banks and credit unions.

The treasury said in a statement that for the next year, the U.S. Treasury will insure the holdings of any publicly offered eligible money market mutual fund - both retail and institutional - that pays a fee to participate in the program.

What if my bank is online is my Savings or Certificate of Deposit account insured?

Make sure the bank is backed by the FDIC or the NCUSIF The National Credit Union Shares Insurance Fund is administered by the National Credit Union Administration(NCUA) providing deposit insurance to protect deposits of credit union members.Funded completely by participating credit unions, no taxpayer dollars have ever been used to bail out a credit union. The NCUSIF is backed by tthe United States government.

Online Banks ING Direct is FDIC insured and does business online, over the phone or by mail. Offering one of the highest savings rates with no fees and no minimums.www.ingdirect.com/

Ways to make your stash last

During a down economy, it is time to start saving more money and spending less , not incurring anymore debt and looking for ways to cut back on using gas, electricity and conserve water resources.

Set a budget when going grocery shopping, look for ways to recycle and eat in instead of eating out, have friends over and rent a DVD instead of going to the movies. Look for ways to cut back and save for your future during a time of recession and hard times it takes endurance and persistance to make your cash stash last.