1. Here are some of the best recession stocks:
2. Gold and silver. Ex. $GOLD, $PAAS
3. Defense stocks such as $LMT and $GD
4. Consumer staples such as $WMT, $TGT, and $JNJ
5. Bonds

However, there are sectors that are still strong because of continued revenue. As others struggle to make ends meat there are the tough stocks that hang in there.

The stock market trades in cycles. What goes up must come down. Learning how to trade during a recession helps to take the sting out of it.

Everyone wants to know where to invest in a bear market. Who doesn’t want to always have the ability to make money no matter the economic climate? In fact, the best recession stocks allow that.

Positives

Did you know there are even some positives about a recession? It may not seem that way; especially if you’re affected by it. However, even with the bad there is some good.

In a strong economy everyone is doing well. That means companies can ignore potential problems. Their stock is moving up so the need to address potential problems can be laughed off.

When the recession comes, the actual strength of a company is revealed.

This is good for long term investing. You want a company that is strong in the lean times as well as the good times.

In essence, the fat is being trimmed. It can either expose a company or show the strength of it. Companies can fix the areas they ignored in a strong economy.

Discount Companies

One of the best recession stocks come in the form of discount companies. When the squeeze of the recession hits families, they want to save money so they shop at stores that have lower prices.

They want something that offers more for the least amount. Companies such as Walmart or Costco see a bump during recessions. The discount companies can sometimes take a hit in a strong economy.

Why? Because people are more inclined to go buy higher priced items elsewhere. In order to be competitive in that kind of market they may have to change from thrifty to higher end to compete.

When a recession hits, then the demand for more bang for your buck helps them out a great deal. When you need to stretch your paycheck, you’re more inclined to buy generic instead of name brand.

Sin Stocks

You may be asking yourself what in the world are sin stocks? These are stocks the small pleasures. When the economy is strong and you’re feeling happy, you might go buy a new pair of shoes or an accessory for your car.

When hard times hit, you still want the small pleasures buying yourself a treat brings. Instead of buying big expensive items, you have to settle for smaller ones.

For example, candy or chips; maybe chocolate. Something small that still feels like you’re rewarding yourself without buying the big ticket items. You might pop into a gas station while you’re getting gas and grab a candy bar.

It’s the continual stream of small income that builds up and makes these sectors have the best recession stocks.

When a downturn hits, people and companies are more apt to fix the equipment they have then go out and buy new stuff. So service providers can see an upswing in work.

Companies that specialize in repairing or maintaining equipment see an increase in work. You have to work with what you got in order to save money.

If you’re a baker, you might want to replace that refrigerator case that’s giving you fits. However, it’s cheaper to have someone come repair it than going out to buy a new one.

Hence the reason these companies can do better during a recession.

Finding the Best Recession Stocks

There’s a menagerie of stocks that do well in a recession because people need them no matter what. Stocks such as healthcare companies, tax companies or waste management companies.

Even in a recession people are going to get sick and still have to deal with tax day. With this in mind, look at companies and sectors that people still need no matter the market situation.

These are the stocks that are going to be consistent. They may not be flashy and have huge moves up but they’re slow and steady. Sometimes slow and steady wins the race.

Bottom Line

The best recession stocks are companies that still make an income in an economy that’s hurting. Do some research on the financials of these companies to see how they fared in a recession. Trade them with caution and remember not to get greedy.