Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: How to best take advantage of the coming recession?

news.ycombinator.com

Post reply on HN
Print view View original

21–30 of 83 posts

Re: Ask HN: How to best take advantage of the coming recession?

#21

Post by KMag »

willbes wrote: post #16
roflyear wrote: post #10

Earlier quoted context omitted.

They do not exist, absolutely. 4% is a good number for dividend paying stocks. Also inflation isn't over 15% hahaha.

Dividend paying stocks will be pulling from the value of the stock. The 4% you get will immediately drop the value of the stock by 4%ish. Dividend paying stocks may not be a great option for most US people (and maybe others) unless they are in tax-advantaged accounts. You will be taxed on that as income and not capital gains, which would have occurred if you had a stock that held value and then sold it when you neede…

In other words, ignoring taxes, in a long-term holding strategy, one would expect reinvesting dividends from a stock to perform as well as if that stock just didn't pay dividends (all else being equal, which it never is).

Though, taking into account taxes, the tax on dividends is effectively compounding annually while capital gains taxes are a simple rate. As long as the dividend tax rate for stocks held long-term is equal to the long-term capital gains tax rate, it's more tax-efficient for investors if a company buys back its own stock instead of paying dividends.

This is also the logic behind end-of-year loss harvesting: compounding interest on tax savings in capital gains losses.

I'm not an accountant or tax attorney.

Re: Ask HN: How to best take advantage of the coming recession?

#22

Post by WhiteBlueSkies »

satvikpendem wrote: post #17

I will post again my answer to what someone else asked similarly the other day [0]: One thing we must make clear is, is there actually a recession? Many companies are firing, but they've fired much fewer than they've hired in the past few years. Many companies are still hiring now. I don't think there is a recession, much as people might be scared that there is. [0] https://news.ycombinator.com/item?id=34296393

I really dk why you're being downvoted. Seems the only correct option when hysteria starts is to join it.

Re: Ask HN: How to best take advantage of the coming recession?

#23

Post by jedberg »

In the 2002/2003 recession I shifted all my investments to REITs. That worked out pretty well, and when those topped out I shifted everything to VTI (total market index) and rode that up to the top.

But basically you want to be in investments that are easy to liquidate and will generally hold steady, so that when the bottom comes and goes and we're out of the recession you can quickly shift to growth vehicles again.

Re: Ask HN: How to best take advantage of the coming recession?

#24

Post by st4lz »

Plan all big improvements to your house, when the construction sector would have a hard time finding a job. Any expensive improvement like roof, road, fence should be much cheaper.

I consider the Eastern Europe having unique opportunity these days, as the Ukrainian market has extremely good potential to grow in many areas. If it goes EU+NATO direction after the war, it may boost the whole region and follow the direction set by other countries two decades ago. Just the property market alone rose manyfold in those countries after the EU access.

I am in a similar position to you, living in EE country as well. We may exchange some contact and share some more info if you are interested.

Re: Ask HN: How to best take advantage of the coming recession?

#25

Post by incomingpain »

granshaw wrote: post #4

The most talked-about coming recession ever... don't go overboard, in case it doesn't happen...

In 2018 several high ranking economists as well as Powell said they know how to prevent recessions.

https://tradingeconomics.com/united-states/gdp-growth

Had 1 in 2020, and 1 in 2022. On average they are 7-10 years between. Split US government control likely going to result in balanced budgets. High cost to debt means less spending.

Reality speaks, the next recession is always coming.

Re: Ask HN: How to best take advantage of the coming recession?

#26

Post by zamalek »

incomingpain wrote: post #25
granshaw wrote: post #4

The most talked-about coming recession ever... don't go overboard, in case it doesn't happen...

In 2018 several high ranking economists as well as Powell said they know how to prevent recessions. https://tradingeconomics.com/united-states/gdp-growth Had 1 in 2020, and 1 in 2022. On average they are 7-10 years between. Split US government control likely going to result in balanced budgets. High cost to debt means less spending. Reality speaks, the next recession is always coming.

> Reality speaks, the next recession is always coming.

The question is about which plans it affects. This year, next year, or seven years from now?

Re: Ask HN: How to best take advantage of the coming recession?

#27

Post by WXLCKNO »

Apreche wrote: post #20

Invest in yourself. Everyone is in the same boat together. Just be the best you that you can be.

While it's a nice sentiment, it's not very actionable.

The question is coming from someone who saw his family go through financial hardship previously.

We're all in the same boat, like the people on the titanic were.

OP is asking how to get onto a lifeboat.

Re: Ask HN: How to best take advantage of the coming recession?

#28

Post by 1nd1ansumm3r »

Success often arrives through pre-established channels. If there is something you are already good at, maybe direct your efforts there. Employ some other data scientists and a sales person and you can run the show. Or use your cash to swoop in on some down markets. Essentially stick to a workflow you are already familiar with.
Post reply on HN