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Best Investments in a Recession

Omkar Phatak Jan 11, 2019
With recession bringing down corporate giants, subverting big banks to their knees, and stock indices taking a beating, one wonders what are the best investments in such a time. Some suggestions are provided here.
Recession drastically changes the economic and investment scenario of a country. Those who were careless and overspent their funds when the economy was booming, will suffer during a recession.
When people forget the unwritten rule, 'Everything comes at a price', recession must set in, to remind the forgotten aphorism. Unfortunately, nobody can be insulated from recession, as we are all part of a globalized economic system. An economy must go through such periods, to emerge leaner and stronger than before.
However, those of you who were wise enough to be careful with your savings and spending, before the economy went into a slump, can profit from this period of recession.
The economy slows down during this period, but things don't come to a standstill. The show must go on and it does. Indeed, as many big businesses crash during recession, many more become stronger due to the new opportunities which the situation presents.

Best Investment Options During a Recessionary Period

As per a few advices, cash or liquidity is an asset during recession. The more liquidity you have, more are your chances of staying afloat. During these times, liquidity is the main problem. So, good investments in a recession are the ones which can ensure a steady cash flow and keep the business wheels turning.

Gold and Precious Metals

Gold is a profitable investment, even in periods of recession. Other precious metals like platinum and silver also work well, in an economic slowdown. There are fluctuations in gold prices but it always recovers ground as the world loves gold.
There are reasons for gold being a safe option. The main reason is currencies of many countries are still correlated with it. The rarity of gold makes it an interesting option. This is why it has been the investment standard since ancient times. If in doubt, buy gold or invest in other precious metals.

Real Estate

Why would one suggest 'Real Estate' as one of the best investments in these times, when the crashing of the market was the 'prime' (rather sub-prime) reason that caused the collapse? For the very same reason. The properties in prime localities and business areas, which were once beyond your reach, can be bought or rented today, at substantially lower rates.
If you are looking for business expansion into bigger premises but were holding it off due to high prices, then now is the time to go for it. Real estate investment is a good option, if you can generate revenue from the business conducted in your property acquisitions.
If you are hoping to make money through resale of the properties, then recession is not a good time to invest. Only for expansion purposes, recession is a good time.

Treasury Bonds

These bonds are some of the most low-risk investments you could ever make. Their yield is low, but they are safe options. If you cannot trust the US treasury, in whom will you place your trust? So, treasury bonds are a good option. They can give you steady and fixed returns.

Your Own Business

One of the best options is to put money and effort into your own business. The advantage is that, at least, in this kind of investment, the variables that will decide its future, are mostly under your control.
Thinking small is a crime and recession creates a lot of opportunities, in terms of cheaper infrastructure. You can acquire and expand your business also, in terms of manpower, as recession renders many skilled workers to be jobless. So, investing in your own business, if you have faith in its growth, is a good idea.
There are more options like blue chip stocks, with a high growth potential and foreign currency. Be it any choice you make, there are always going to be risks, but then there are no gains without risks.
One cardinal rule, often recommended by master investors, is to not invest in any sector, that you do not understand. In short, make an informed choice of investment, within your circle of competence.