I’m a Financial Planning Expert: 5 Best Purchases To Make in an Economic Downturn
Written by
Laura Bogart
Edited by
Ashleigh Ray
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You’re probably used to taking the economic temperature of the moment by reading headlines about impending recessions, feeling the pinch of inflation at the grocery store and reviewing your bank statement with bated breath. If you sense a downturn, you’re probably locking up your wallet and circling the wagons around your expenses.
However, despite what you may think, there are certain purchases you’ll want to make in an economic downturn. With caution and strategy, you can use these purchases to help save, or even make, money in the long-term. Whether you jump on them right now, or as you sense the darker clouds rolling over the fields of green, you should look into making the following buys.
Investments in ‘Recession-Proof’ Industries
The prospect of playing the market in any way during a downturn might seem preposterous. Yet according to Steven Kibbel, certified financial planner, entrepreneur and financial advisor at Prop Firm App, you might be wise to take a chance on investments associated with the kinds of businesses that can flourish in rough economic periods.
“Though hard times with money seem bad, they can offer good chances to invest that you’ll want to use,” he said. “Certain types of business often do well when money is tight. People need basic consumer products, necessary services and health care. These are smart places to put money.”
Stocks That Pay Regularly
Kibbel also recommended that people look into stocks and real estate funds that pay out regularly, even when the economy seems weak, since it provides stable income.
“You might also put some money into items like gold, as protection against swings in the stock market and rising prices,” he said. “Finding opportunities and hedging risk can prepare your money no matter what happens.”
Investments in the Tech Sector
Marek Soska, founder of RebelsFunding, concurred that some stocks are safer, or at least less vulnerable, than others during an economic downturn. He cited stocks associated with companies that offer essential technological services, such as cloud computing and cybersecurity, as resilient options.
“Microsoft and Salesforce in the cloud sector, and Palo Alto Networks and CrowdStrike in cybersecurity, are good examples of tech investments that provide critical infrastructure businesses can’t do without,” he said.
High-Yield Savings Accounts and CDs
While it’s almost always a good time to investigate the high-yield savings accounts and CDs that can help you grow your money, Soska said that you’d be especially wise to look into your best options during economic slowdowns. He shared that going for banking products that provide higher interest rates can help you find a safe place for your money in an uncertain time.
“High-yield savings accounts from online banks like Ally Bank or Marcus by Goldman Sachs provide better returns than traditional savings accounts,” he said. “Additionally, locking in interest rates with longer-term certificates of deposit (CDs) can offer stability and predictable income.”
Real Estate and REITs
Soska encouraged savvy investors to look to real estate as a solid investment, keeping your eye toward stable rental properties or real estate investment trusts (REITs).
“Residential properties in good neighborhoods provide reliable rental income, and REITs focused on sectors like healthcare and industrial properties tend to be more resilient,” he said. “Welltower and Prologis are examples of REITs that have performed well historically.”
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