We'll be in the midst of a recession by August 2023. You can already feel it; you're just not aware of it yet. Given that the US midterm elections are taking place in November, 72% of economists predict a recession in the US by the middle of the next year.
While everyone with half a brain is already experiencing anguish and fear, the government is making a lot of effort to make it appear like business as usual. We had a pandemic, a war, the worst rates of inflation in recent memory, the failure of China's largest real estate developer, and problems with the supply chain. The bill is owed everywhere in the world. While your pay barely increased by 5% over the past two years, your mortgage or grocery bill nearly doubled. You have the chance to prepare if you read all the way through this article. These 15 assets are resilient to economic downturns.
1. Stocks in Technology
This year, tech stocks have fallen, and many people are concerned that these corporations are growing too large. But if we look ahead, will Google still exist in 10 years?
Will Amazon still be successful during a recession? Look at the tech businesses you often use since if you do, then others probably do too. Previously, tech lagged behind retail in terms of returns, but now, in our opinion, tech has passed that threshold. We developed Airbnb, Uber, Venmo, Whatsapp, Groupon, and more as a result of the 2008 financial crisis.
2. Learning for Oneself or Mastery
Nobody can take away what you've previously learned, so investing in yourself is recession-proof; the more financially literate you are, the less impact a recession has on both your finances and your mental health.
You have two options with this investment: either learn a new skill that will open up opportunities you did not previously have access to or hone an existing skill that will increase your demand like never before. Due to the first-time acceptance of remote employment outside of your existing job, this recession is different from prior ones.
Regarding other initiatives, several people will act as consultants or independent contractors. We'll be releasing a new course later this year called "freelance mastery" where we'll teach you everything you need to know about transitioning from employee to freelancer and finding clients from all over the world. If you currently have a job and want to improve your skill set so that you no longer act as an employee but as a business, you'll be happy to hear this.
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3. Gold and Precious Metals
The untrained investor's preferred hedge is gold, which protects against inflation and economic downturns. Silver is a close second, and in the coming months, you'll hear more and more old-money voices advocating diversifying into metals.
Why? Because governments must stimulate the economy in order for economies to recover from recessions, and their preferred method of doing so is by printing more money, which raises the financial supply and, because gold is a relatively scarce asset, boosts the value of the metal. The issue with printing more money is that they've been doing it for a while now, which has resulted in inflation reaching historic highs.
4. Automation
Automation is the last item on our list, and we think that it will happen eventually, just like recessions do. In fact, we think that automation will become more common during recessions since companies will be working harder to cut costs and stay in business.
Numerous young automation businesses are operating now and are accomplishing amazing things. Robots will do all of the labor-intensive work as software consumes the planet. Considering it Wages haven't increased, but prices have. People will soon stop working and demand higher compensation, incentivizing businesses to increase their investment in automation.
Do two additional touch-screen kiosks that do the same function instead of raising the minimum wage of a chain restaurant like McDonald's to $25 to make more sense, in your opinion? Expanding your time horizon is the best way to make sure you survive and grow during a recession. We ask you this question because recessions are cyclical, there are always fresh ones on the horizon, and they are a normal component of the economic cycle.
5. Sustainable Businesses
We adore companies with solid foundations that provide excellent products to a loyal customer base. Businesses that have existed forever and will be around in 20, 40, or 60 years are said to be "evergreen."
Home Depot will likely now make it through a one- to three-year slump. Consider your children. Even if you might have to make cuts during a recession, you would still send your children to daycare or school. Even in the event that one of your grandparents dies away, you would still employ a funeral home's services. Some companies won't ever close since there is always a need for them. If you'd like to see a list of evergreen firms, click in the top corner. We actually made a movie on them quite some time ago.
6. Blue Chip Art
The majority of you may find it surprising, but one of the finest methods to safeguard yourself during recessions is through art, especially high-quality art. Blue chip art is rare and in high demand from consumers who are unaffected by recessions; paradoxically, wealthy individuals actually get even wealthier during recessions.
Over the past 25 years, the art market has regularly outperformed the S&P 500 real estate and gold. In addition, art has performed well even when there has been inflation. Hey, Lux, what do I know about fine art, or how am I going to be able to purchase a Picasso or a battle hall? In this case, our friends at Masterworks can help. Instead of purchasing the artwork on their own, everyone can invest in fine art through the Masterworks platform. They divide up ownership of a painting into shares rather than purchasing the original.
You can purchase shares in a firm and sell or buy these shares at any moment, just like a company can do with stocks. One of the major trends we are observing is fractional ownership, and Masterworks' implementation of it in the art world is particularly impressive.
The platform has also given us the opportunity to learn about the trends in the art world and realize just how lucrative the art market can be, especially since there is no minimum investment amount. Masterworks had been mentioned previously, so when they contacted us to sponsor this film, it was a natural fit. There is a waiting list to get on the platform.
7. Consumer Staples
Consumer staples include brands like Procter & Gamble and Colgate that people will continue to purchase regardless of the state of the economy. You use products from brands like Palmolive, Pepsi, Nestle, L'Oreal, Unilever, and many more every day. Take a close look at the things you buy out of necessity rather than want. Regardless of how bad things become economically, you'll still need to buy toilet paper. Purchase some stocks in the businesses that produce those goods. Here is a quick comparison of the consumer staples sector's post-crash returns to those of the S&P 500.
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8. Hedge Funds
If you are already wealthy in our neighborhood, ask your financial advisor for a list of local hedge funds that performed well during the previous two recessions, and then start setting up meetings. In essence, these organizations are searching for any chance to generate as much money as they can in the shortest amount of time.
Because they strategically wager against the market, hedge funds get their name. Some of you have watched "The Big Short" on the big screen. Well, a few hedge funds anticipated the collapse of the housing market and made sure to profit from it. Stephen Bury, We have gained a great deal of knowledge from hedge fund managers like Carl Eichen, John Paulson, and Ray Dalio.
9. Stocks of pharmaceuticals
You may choose to invest directly in pharmaceutical companies like Pfizer, or you could choose to use Walgreens, CVS, or Rite Aid as your retail partners. Disruption is possible throughout the pharmaceutical industry. Our attention has been drawn to Mark Cuban's Cost Plus, an online pharmacy that offers cheap generic copies of well-known medications. Like him, there will be other companies that follow in his footsteps.
10. Telecom
This generation has taught us that you may go without food for a few days and call it extended fasting, but don't mess with my internet. We depend more than ever on telecom, which is expanding at a rate of over 10% annually. When the recession strikes, many people in traditional roles will lose their jobs and attempt to switch to different work opportunities. Work from home is more common, and in a downturn, businesses will likely reduce the number of offices they keep open because rents would be too high, encouraging even more workers to do so. As a result, the telecom industry will continue to expand.
11. Grocery Stores
In the past, businesses like Walmart, Costco, Kroger, Aldi, Sam's Club, Little Dollar Store, and others have thrived. Here are three well-known consumer staples chains, including Whole Foods, and how Walmart and Costco's performance stacks up against them. Whole Foods often suffers the most as shoppers become more price aware. Learn more information
12. Life Insurance
One of the boom plays of a recession is insurance, but more significantly, life insurance. You might not be aware of it, but wealthy individuals utilize life insurance in ways that are completely different from what you would anticipate since it is a tool for wealth accumulation—like it's a tax-free personal bank. In essence, they invest their funds in life insurance plans instead of banks, allowing them to borrow money tax-free.
In the future, recessions will frequently cause worry and financial hardship, and since insurance firms do well, they can fit well into your portfolio.
How long do you believe the current severe recession will last?
People seek cheap alternatives to escape and forget about their financial woes during recessions, which encourages vice consumption and is profitable for businesses like Philip Morris and Friends. Everyone is seeking more money during recessions because money's purchasing power isn't as plentiful as it once was. As a result, lottery play increases. This recession won't follow the typical pattern of market correction panic followed by recovery. Elon Musk himself forecast a recession lasting 18 months, and our internal data reveals comparable market trends.
