A recession as we know is a period of negative growth in an economy. There are also higher rates of unemployment, falling wage rates, and also governments borrow more money. As we know, it has been more than 6 years since the end of the Great Recession, and we will not forget about it for years to come. There were a plethora of lessons to be learned from that by investors who were swept correctly away by a panicking herd only to witness their retirement accounts be devastated by almost 50% of overall loses. In the year 2016 a lot of people know that if they just held on, all their accounts would have fully and completely recovered and gone on to double in value properly. When it comes to a recession, you should know that the recovery will include a strong rebound in the stock market. We should also know that investors don’t exactly have to sit idly as all their portfolios get thoroughly pummeled by the massive selling. There are indeed some investment strategies which can take advantage of the recessionary forces and can position your portfolio for a quicker, stronger, and back to normal or better rebound.
These are the ones that benefit from a recession:
– Companies which are dealing with complete and utter bankruptcies and IVF.
– Companies that have a lot of debt problems.
– People who make use of physical means of paying money (cash) for goods and also pawnbrokers.
– It is also said that bookmakers and publicans do really well in a recession because people prefer to drown their sorrows while gambling and also intoxicating themselves. So you could say that bars and pubs also benefit from a recession, but who are we kidding? They are always successful and are always filled with people.
– Analysts and also, economists get to talk about recession and also talk about how to get out of it; people will heed to their advice, and the analysts and economists get to make off of this.
– The falling prices of assets can surely make it cheaper to buy a house and is amazingly perfect for first-time buyers.
Invest in consumer staples: Even during recessions, people need to buy food, clothes, drugs (pharmaceutical) hygiene products and also medical supplies. These are the consumer staples, which are the last items to be cut from the family budget. So while companies that are selling things like consumer tech are likely to have a drop in revenue, companies which are selling necessities like food products will not experience this.