It could be either traditional asset classes or alternatives we don't usually think of.
What about in a DEEP Depression-equivalent era? Is there a class of assets that should be held or BOUGHT that would make your outlook more stable or even profitable?
Or is this just a pipe dream and just keep buying VTSAX?
Thanks!
In a Recession, What Assets Hold Value the Best?
byu/ilmwas ininvesting
Posted by ilmwas
5 Comments
I believe Treasury bonds did all right even during the Great D. Full faith and credit of the US government and all that jazz. Other investment-grade bonds are also supposed to do OK.
Consumer staples. Companies with strong fundamentals/balance sheets. I assume most of the mega caps will hold up well. Companies that can weather the storm
Bonds could work, to a certain extent. Because once rates hit zero, there’s not much to be gained.
Shorting stocks could work to a certain extent, because after a while not many will want to be on the other side of the short. You can do this via managed futures.
For a deep enough depression, the issue is usually systemic and the government needs to step in to spur production and consumption.
No one can comment on depression era assets because we haven’t been in that situation in going on a century. Even if you could speak from experience, the world has changed so much that that experience likely wouldn’t be of any value.
A recession is not an incredibly rare occurrence. But I think if you grabbed the last three or four recessions, you’d have completely different asset classes rising to the top. Simply because the world changes. There’s stuff that didn’t exist back then or was in its infancy or was at the height of its maturity, etc.
Unfortunately, you’re looking for a one size fits all regardless of era and outlook. And there is no such thing.
Precious metals, bonds