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Look for companies and industries that can pass rising costs onto customers more easily. So typically staples over discretionary. Fuel, food, medicine.
Earlier quoted context omitted.
Keep a robust emergency fund on hand, always be networking, just be prepared for the separation call. Low burn rate + emergency fund + unemployment insurance = safety net during a recession. If you have any health issues you’ve been putting off having addressed, do it now while you have insurance.
By unemployment insurance, do you mean state run unemployment? Or are there reputable private insurers?
Earlier quoted context omitted.
I would disagree - when average Joe loses his job due to a recession they are going to need some form of entertainment to fill their now wide-open schedule. People here might find torrenting and piracy pretty trivial but the average Joe is going to find it a much bigger hurdle than simply logging into Netflix and pressing go.
But how does average Joe pay for the account, if the prices for groceries, electricity, heating and transportation explode? If things go really south, average joe will be happy if he can afford food and heat his rented flat at least a little bit in winter.
It varies depending on the context of each recession. For the likely upcoming recession, energy/industrial/agriculture/real estate. In other words, hard assets, manufacturing, and commodities.
On a historical note, I would add: Biotech: Development times are long. Products will come online that were developed during the peak. Also startups become more affordable when competing industries flag. Entertainment: the movie business has historically weathered most recessions pretty well. They can release things that were already made during the fatter years. Education: Historically this has done well during recessions (people who lose their jobs go back to school). Unclear if this will be as likely at this stage since the prices are not exactly favorable.
It varies depending on the context of each recession. For the likely upcoming recession, energy/industrial/agriculture/real estate. In other words, hard assets, manufacturing, and commodities.
How does real estate make sense when interest rates are rising?
Even with rising interest rates, if someone locks in a loan where they can break even with renters, they can sit on the property waiting for the market to recover.
This looks particularly attractive in the scenario where high interest rates combined with a recession creates difficulties for many people to purchase a home, in which case they will rent and be paying off someone else's loan/giving them a return on their invested cash.
Unlike companies, property doesn't go bankrupt. It can devalue, but there is often inherent value in the fact that it can be rented out, so there is decent stability. I guess, though, if there is a major regional shift where the property is located, like a manufacturing plant in the midwest shutting down, there could be a drop in housing prices and rental demand that would be very difficult to recover.
Any company that is pre-revenue or is subsidizing growth by under charging for their services will be in a bad spot (unless they have a long run way).
Hmm.. how about instacart?
I'd be worried if I worked there...