The top or best investments for your portfolio in recessionary times include those companies that benefit in spite of hard times. Instead of getting deep into the economics and determining product elasticity (or in-elasticity), which would add a bunch of confusion for my readers not versed in economic theory, this article will simply focus on those companies doing well in the recession. Please keep in mind, as times get better – these companies are destined to come back to earth with regards to their earnings and stock prices.
The following list of types of companies and products is not all inclusive, rather a starting point for helping you further explore companies that may be profitable now that we are struggling and still losing jobs.
- Discounted grocery stores and fast food: People tend to look at private label brands more favorably as their income falls. Restaurants have been hard hit, as more people pickup groceries and stay home. Look of for companies that manufacture items like pastas, noodles, etc. On the flip-side, smaller fast food chains may pickup if their menus adapt to consumer demand for cheap meals. As more and more people stay home, things get dirtier, hence, items like cleaning goods and personal care items may see an increase in sales as people choose to cut their own hair, do their own nails, and color their own hair.
- Alternative Transportation companies: Over the road truckers might be in for a real shock if they haven’t experienced it already at the pumps, I’m guessing as they lose the ability to make transporting profitable, rail companies will get their business. As oil prices continue to rise, flatcars pushing containers will become common place again.
- Low cost providers: People will lose an appetite for extras when it comes down to it. Seek those companies that are generic and cost efficient.
- Aerospace companies and companies whom make defense systems.
- We can’t forget about staffing firms, with many people out of work – their services will be demanded.