Kavan Choksi / カヴァン・チョクシDiscusses Things to Invest in When a Recession Hits

The economy moves in cycles. Periods of economic strength is followed by contractions and vice versa. Kavan Choksi / カヴァン・チョクシ mentions that historically recessions have occurred about once every five to ten years, even though the length of time between recessionary periods may differ. Investors need to prepare for recession beforehand to protect and grow their wealth. Stocks can perform even during a recession; investors just need to know which ones.

Kavan Choksi / カヴァン・チョクシ shares insights into the investment approach to follow in a recession

It is common for investors to be inclined to give up on stocks during a recession. However, it is better that they do not completely flee equities. Even when most of the economy is on shaky ground, there tend to be a few sectors that continue to forge ahead and deliver steady returns to the investors.  Investors should particularly consider investing in the healthcare, utilities and consumer goods sectors to insulate themselves during a recession. After all, no matter the state of the economy, people are going to spend money on food, electricity, household goods and medical care. Investing in dividend stocks would also be a smart way to enjoy passive income during a recession. While comparing dividend stocks, it is prudent to search for companies that have low debt-to-equity ratios and strong balance sheets. 

Buying real estate during a recession can also be a smart move for many. The 2008 housing market collapse was a nightmare for homeowners, but it did turn out to be a boon for some real estate investors.  As a recession hits and home values goes down, it may end up being a good buying opportunity for investment properties. If one is able to rent out a property to a dependable tenant, they would have a steady stream of income while riding out the recession. As real estate values start to go up, people can sell at a profit.

As Kavan Choksi / カヴァン・チョクシ says, people can also consider purchasing precious metal investments during a recession.  Precious metals like silver and gold generally perform well during market slowdowns. However, the demand for these types of commodities usually goes up during recessions, and their prices rises as well. People can invest in precious metals in a myriad of ways, the most straightforward route being purchasing coins or bars from a seller or coin dealer.One may even choose to invest in ETFs. These funds basically are collections of investments within a single industry, which can include the precious metal market. People may even purchase a gold IRA if they are saving specifically for retirement.

If a person unfortunately loses their job and income during a recession, they can rebound by opting to “investing in themselves.” Doing so might involve returning to school to acquire additional knowledge or skills that can help secure a job with a better salary.