Recessions encumber a tremendous part of the economy, but not all sectors and companies take a hit during recessions. As a matter of fact, some flourish as investors panic and cast around for securer locations to put their money.
In times of financial crisis, half the battle is simply staying calm and sidestepping panic selling or attempting to time the market. After every recession all throughout history, no matter how ugly things look in the financial market— stocks always recover.
Economic downturns are a natural part of the economy’s flow. Yet, unfortunately, no one wants to see what it does to their portfolio stock. If you are one of the people who get afraid every time the market declines, you might want to avoid worrying by going for recession-proof investments.
We will be facing a recession by the end of August 2023. In fact, it’s already commencing, although you might be feeling it just yet.
Since the U.S. election is coming up really fast, the government is trying really hard to make it appear that it is business as usual, but everyone with a half-brain has already been feeling the pain and anxiety. We’ve seen crazy inflation hikes, wars, the fall of China’s biggest developer, the pandemic, and even severe supply chain issues—now, the bill is due.
Here are some recession-proof investments that you might want to invest in 2022:
Customer Staples
There are just some things that some people will continue buying no matter how the economy is going— for instance, Procter & Gamble (P&G), Colgate, Palmolive, Nestle, Unilever, L’oreal, and anything that people use on an everyday basis.
Identify the items that you usually buy out of necessity and not out of luxury. Look for items that are basic needs for daily survival. After that, study the company that produces them and buy some stocks if you think the company will do well in the future.
Telecom
Nowadays, people can go without eating for days, but not without the internet. Year after year, the telecom industry has been growing by 10%, and we are getting more and more dependent on it than ever. Unfortunately, this possesses a negative impact on people working in traditional roles. We can see it now. Work-from-home jobs are becoming the norm.
When the recession kicks in, many companies will downsize and cut down the offices they maintain since headquarters rents will be too expensive. As a consequence of this workplace shift, more people will use the internet, and telecom will continue to grow.
Cheap Fast Food
The consumption of fast food is correlated directly with the economy. Individuals with more money eat in more grandiloquent restaurants, and when disposable income declines, it’s back to dining with the king and the queen. KFC, McDonald’s, Domino, Taco Bell— these fast food chains do well even amidst a recession.
Tech Stocks
Tech stocks have taken a beating this year with trepidations that tech companies are getting too big. If you want to put your egg in this basket, consider looking into the future.
For instance, do you see Google still being around in the next ten years? Do you think Amazon will continue flourishing even amidst a recession?
Consider the tech companies that you use on day to day basis. This is because if you are using them, others are making use of them as well, and what does this mean? Money.
Pharmaceutical Stocks
Recessions are prospering ground for pharmaceutical companies. They have taken pleasure in a huge increase during the pandemic. You could go for pharma companies like Pfizer, or you could put your money into the retail route with Wallgreens, CVS, or Rite Aid.
Self-Education or Mastery
Any material things that you possess can be taken away from you in a blink of an eye. Well, except for your knowledge. No one can take away from you everything that you have learned, so investing in knowledge is definitely recession-proof.
Keep in mind that the more financially educated you are, the lesser the impact a recession has on your financial and mental health. This type of investment is split into two.
First, this would help you acquire a new skill that will allow you to access new opportunities that you didn’t have access to before. Second, this would allow you to master a current skill so that you will be more in demand because of your ability.
Compared to the previous ones, this recession is quite different because this is the first time that remote jobs were embraced to an enormous extent.
Upgrade your skills so you will no longer need to act as an employee for the rest of your life but rather have the freedom to acquire clients from all over the globe.
Gold and Precious Metals
Gold is a good hedge against inflation and economic downturns, and it often gets used as a hedge by unsophisticated investors. Silver is a close second.
In order to get out of recessions, the government throws money at the economy to stimulate it. In return, this increases the financial supply, and since gold is a fairly scarce asset, which value continues to go up as time passes by.
The government has been printing money for the past few years, leading to inflation. If you’re young and have all the time in the world to let your money sit and grow, you can invest in Bitcoin, which is considered the “gold 2.0.
