A decrease in commercial and industrial activity will generate an increase in the unemployment rate and a drop in wages. Most macroeconomic indicators lead economic experts to predict a recession in the near future.
This future crisis seems to be made up of small crises, such as the ones mentioned below:
- Post-COVID stock market correction.
- Russia vs Ukraine war.
- Credit bubble and interest rates.
- Shortage of food due to the military confrontation.
- High energy costs.
All this accumulation of circumstances could put the world in a delicate situation for the future.
Therefore, large investors are preparing to deal with this situation. It has always been said that a time of crisis is a time of opportunities, so if investors study the panorama well and draw good conclusions, they will be able to benefit from this a priori unfavorable situation.
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Below we give you some indications to be able to carry out investments with a greater probability of success.
Access to the stock markets is easier than ever, with so many options on the Internet, the possibility of investing in financial markets that manage to remain profitable in an unfavorable situation is real.
If you don’t have experience trading stock markets, you can take advantage of promotions from brokers like Axi, which provide a copy trading service. In this type of trading you do not need to be an expert, since it allows you to copy the portfolio of a successful investor to obtain the same results.
These types of brokers help the investor to take their first steps in the financial markets. In addition, they can also give information about what type of assets are giving a better return. For example:
Tech Stocks: In a study carried out by B. Hershbein and Lisa Khan, it was shown that the industry with the greatest demand during the Great Recession of 2008 was technology. This could happen again.
Health Sector Stocks: As in the strong periods of the pandemic, where companies in the health sector saw an increase in their shares, everything indicates that the same thing will happen in this next recession.
Retail Stocks: Walmart, Lowe’s, Amazon or Target, are e-retailers that usually survive quite well in stormy times with their discounts.
volatile markets: Although the old logic of investors would say “invest in the least risky market”, the most recent reality indicates that it is in volatile markets where the best returns are found in times of pressure.
The following stocks are some of the ones you should watch in the next recession, all four have managed to survive similar situations in the past with good results.
The American multinational producer of pharmaceuticals, medical devices, personal care, perfumes and baby products is one of the companies with the best forecast in an upcoming recession. This is because its pharmaceutical and essential component will be the one to carry it forward.
With an excellent performance in 2020 thanks to the vaccine it produced with BioTech against COVID-19, Pfizer is another stock that is shaping up well for an upcoming recession. The pharmaceutical company, despite not having good results during the 2008 recession, where it lost 20.00%, recovered in the long term with an increase of more than 300%. In a different context, with the pandemic still raging, Pfizer may do even better.
This company is the definition of German engineering. It is considered the largest industrial and technological manufacturing company in Europe, which has 190 branches throughout the world. It is positioned as one of the strongest values in the face of a recession, since its business lines touch on three basic pillars: the energy, health and industrial sectors.
While Microsoft doesn’t stand out because its products have the same luxurious touch as Apple or the volume of sales as Amazon, when it comes to developing new technologies and doing it intelligently, they take first prize. In an upcoming recession it is important that you put the magnifying glass on shares of fast-recovering Tech companies like this one.
In case this is the first recession you’ve experienced, we’ll give you some general suggestions that economic experts usually offer to ordinary citizens.
Create an emergency fund: Create an emergency fund for three to six months. The United States Federal Reserve issued a pre-pandemic study reporting that 40% of Americans were unable to cover an unexpected expense of around $400.
Pay debts and reduce expenses: Pay the interest on your cards, settle debts with private capital and reduce your expenses as much as possible.
Store food and water: Russia and Ukraine are two of the major grain exporters, the war will cause a shortage that will impact prices.
While a recession is a delicate situation, it also opens up an opportunity for new investors.
This information should not be construed as a recommendation, or as an offer to buy or sell, or as the solicitation of an offer to buy or sell any security, financial product or instrument, or to participate in a trading strategy.
The information contained in this article is aimed at those who want to be educated and learn which financial assets respond best to a recession.