Top 5 Investment Opportunities during a Recession
To the average person, a recession is not the right time to make investments. Some people react quickly by pulling out their investments at the slightest sign of economic downturns. This is the period core investors step in to make the kills. With the novel coronavirus causing a decline in economic activities around the world, there are so many uncertainties to contend with. Are you willing to embrace the road less traveled by the fainthearted investors? Here are the top five investment opportunities you can consider during a recession:
Consumer Staple Stocks
While almost every stock is a risk during a recession, few are practically immune to economic troubles. The most prominent of these stocks are those that belong to companies that focus on consumer staples. From food to personal care products, there are few things humans can’t live without. Even when the economy is on shaky ground, manufacturers and retailers of consumer staples will continue to enjoy business, and their stocks will do pretty well even after the recession.
Stocks from Reputable Companies
It is also a good idea to go after the stocks of well-established and reputable companies. The idea is that since these companies are well-grounded and have survived many years, they are unlikely to be disturbed by a recession. Even if they are eventually hit, the chances of getting back and growing further are much higher. Companies like Coca-Cola and Google are good examples. If you can get your hands on their stocks, they are almost recession-proof.
Precious metals like gold and silver have survived many centuries and civilizations. Their values may continue to change over time, but they can’t become useless like stocks and other contemporary investment options. Again, they have been found to perform pretty well during market slowdowns. Their prices may go up during a recession, but you can always be sure that they are guaranteed investments that will remain valuable in the long run.
The real estate sector is one of the most misunderstood industries in investment. Many self-proclaim real estate gurus may deceive investors into buying the wrong properties when the economy becomes shaky. Many will come out losing a sizable portion of their investments. This doesn’t mean that the sector is a poor choice during a recession. The poor quality of decisions made by many undermines their investments. A recession provides the right opportunity to buy into the real estate market at friendly prices, and you may come out in a few years, smiling about your investments.
Other Core Sector Stocks
In addition to consumer staples, there are other industries with counter-cyclical companies. Healthcare and utility companies, for instance, are almost immune to economic recessions. People will continue to take care of their health and use electricity and water, no matter how bad the economy gets. While these companies may even underperform during an economic boom, they will not succumb to economic slowdowns.
Long-term investors must take advantage of any opportunity to improve their portfolios. They must make the right decisions during a recession. Even if you are a newbie, knowing where the opportunities lie will help you during a recession and afterward. In addition to the opportunities discussed above, invest in yourself. Additional knowledge of how the stock market works, for instance, will pay off in the long run.