Without further ado, here are 11 investments to consider if you fear that a recessionary bear market lurks nearby.
In May 2018, I discussed three recession-resistant stocks that I thought would do well in the case of a downturn. They were Church & Dwight (NYSE:CHD), DollarTree (NASDAQ:DLTR), and Flowers Foods (NYSE:FLO). All three of these stocks did well during one or both of the 2001 and 2008 recessions.
Key Takeaways
| Top 10 Stocks in the S&P 500 by Total Return During 2008 | ||
|---|---|---|
| Company Name (Ticker) | 1-Year Total Return | Industry |
| Dollar Tree Inc. ( DLTR) | 60.8% | Discount Stores |
| Vertex Phamaceuticals Inc. ( VRTX) | 30.8% | Biotechnology |
| H&R Block Inc. ( HRB) | 25.8% | Personal Services |
Best Depression Stocks
A good investment strategy during a recession is to look for companies that are maintaining strong balance sheets or steady business models despite the economic headwinds. Some examples of these types of companies include utilities, basic consumer goods conglomerates, and defense stocks.
We've looked into recession-resistant products businesses can sell online that will remain economically evergreen:
Investors typically flock to fixed-income investments (such as bonds) or dividend-yielding investments (such as dividend stocks) during recessions because they offer routine cash payments.
Life expectancy can rise.
Also with falling demand, firms respond by cutting prices. This fall in inflation can benefit those on fixed incomes or cash savings. It can also help tackle long-term inflationary pressures. For example, the 1980/81 recession helped reduce inflation from the high rates of the 1970s.
Retail, restaurants, and hotels aren't the only businesses often hurt during a recession. Automotive, oil and gas, sports, real estate, and many others see heavy declines during times like these.
The key to investing during a downturn is to make sure you're putting your money behind solid investments. Don't buy stocks simply because they're cheap. ... These investments are more likely to recover from a market crash. Market crashes can be intimidating, but they can also be good investing opportunities.
During a recession, stock prices typically plummet. The markets can be volatile with share prices experiencing wild swings. ... Because the wages companies pay workers and the prices they charge consumers are "inelastic," or initially resistant to change, cutting payrolls is a common response.
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