Watch this weird 30 minutes Stock Trading FREE Video. Download this Insider Secrets of Successful Traders Report FREE that has been downloaded more than 73,000 times and discover a Stock Trading Strategy that can turn your $2,000 into $1.7 million in just under 1.9 years. Meet Edward Burke, the winner of CNBC Million Dollars Portfolio Challenge and know his Stock Picking Secrets.
All of a sudden the media has started talking about a double dip recession around the corner as well as a massive stock decline that is going to happen soon. The shift has been surprising. Just a few months back, all analysts were talking about recovery and expansion as if the recessionary clouds were finally lifting.
So why everyone is now talking about the double dip recession and the massive stock decline that is going to happen soon? There are many indicators that are pointing towards that direction. The indicators are obvious, global shipping is grinding down to a halt, consumers are losing confidence, manufacturing is slowing down and even China’s super hot economy is now showing signs of slowing down.
There are many other indicators that are pointing towards the recession becoming double dip soon and the stock market again becoming bearish. If you have been following the DOW, it has made huge swings of 1,000′s of points in the last few weeks.
Now, this is the time time to recession proof your stock portfolio. Look for those sectors of the economy that get least hit by the recession. One good advice is to go for dividend paying stocks. The reason is simple, dividend paying stocks tend to hold better than non dividend paying stocks. Biggest dividend paying companies are the ones that tend to provide products that people buy even during times of recession for example pharmaceuticals, electricity, food, health etc.
Sandard & Poor’s data shows that the following sectors outperformed the market even during times of recession;
Alcoholic Beverage Makers not only survive the recession better 80% of the time but data shows that these stocks rose by about 8% during those recessionary times.
Household Product Manufacturers also do better during times of recession and posted a gain of 1.8% during the previous recession.
Tobacco Companies posted a gain of 9.6% and beat the market almost everytime.
These are just a few recession proof sectors of the economy that do not get hit by the economic slowdown. The point is that during times of recession, you don’t need to abandon the stock market. Now, if you are a day trader or a momentum trader than you don’t need to worry whether the market is going up or down.
You profit both ways. If you have been a traditional buy and hold investor than you should think about changing your investment style. What you need to do is to become a short term investor who looks to profit from the volatility in the market. Dan Zanger had turned his $10,000 into almost $42 Million in just under two years using momentum trading strategies when everyone was crying about stock market crash.
You can also use options strategies to profit from the market no matter what it does goes up or down. So, there are many sectors of the economy that traditionally perform well during the times of recession. You can invest in them. You can change your investment style a little bit and try momentum investing. You can invest in options. There are many ways you can still profit from the recession!
RSS FEED