Gold for example, will increase in price in response to any number of potential events; a stock market crash; the outbreak of war; hyperinflation; regular inflation; pandemics; major uncertainty; interest rates; money “printing;” a decrease in the purchasing power of the dollar.
Infrastructure Building and Development
We’ve left it too long. It’s time for America to start putting some focus on refreshing our nation’s infrastructure.
Nothing would give the nation’s jobs more of a boost than rolling out a massive infrastructure spending plan. It resonates well with potential voters, and as such you will be seeing both major political candidates invoking their promises of spending a significant amount on roads and bridges and potholes.
With the timing of the federal election, and based on the promises of the candidates (assuming that they are going to do some or all of what they spoke about to get elected in the first place), there will be a big spike in spending towards infrastructure. As such, any businesses involved may see increased revenues, plus a jump in the amount of work that they have in their backlog.
Military Machinery, Components, and Technologies
It is almost like military-related industries are the “Old Faithful” investments of our economy. Whether or not you believe we spend too much money on military is your own opinion, but the fact of the matter is that almost every political candidate talks about funneling more cash into the military-industrial complex.
Given that we have the next election rapidly approaching, in a matter of a few months as a matter of fact, there have been some promises made by both major political candidates which involve increasing the capabilities of the American military, which by extension implies increased spending.
Even when political candidates are talking about troubles with the economy, or risks to the stock market, they almost never go so far as to discuss reducing military spending. That will cost votes, and potentially act as a weight on the overall economy itself.
In the high-stakes actions which the American military finds itself involved with, fiscal responsibility is typically not front and center. Said another way, you can’t put a price on the capabilities and machinery needed to protect the lives of our men and women in uniform, or to further the political aspirations and strength of the United States.
As such, companies involved with the military-industrial complex typically thrive, if not just survive well, during times of economic and stock market calamities.
Utilities
It is as if these types of investments were created just to put you to sleep. Even in the game of Monopoly, getting both the utilities is not quite as exciting as taking all the railroads, or gaining a monopoly on one of the property colors so you can build up some hotels.
The thing about utilities is that their forward-looking growth is partially stunted. They are not going to double in size overnight, or even over a few years, and they certainly won’t make you rich.
However, the thing that they will do consistently is pay a solid dividend, while holding their value and remaining resilient if most stocks around them collapse in price. Utilities are an industry that most investors can understand, and it is not very difficult to extrapolate what fair value for the shares would be, especially when contrasted with more volatile companies like biotech, disruptive technologies, and the latest “hot” sectors.
Think of it this way — if stocks drop 20%, but utilities hold their ground, it is the same as if those utilities had increased by 20% in comparative value. This is what will make this type of investment attractive during a time when the economy is facing some uncertainties and risks (and the overall markets are potentially sinking).
Cost-Conscious Outlets
When and if the economy starts to stumble, it will be the high-end steakhouses which take the first hit, not McDonald’s. At the same time, widespread economic weakness actually can help certain businesses which compete on price, such as Walmart for example.
In the early phases of any kind of economic correction, some of these “low-price” businesses will actually see an increase in customers. The rich lady who only shops at the finest stores may suddenly find herself trolling the aisles at Walmart looking for a $50 television.
What’s to Come
The ones who prepare for the worst outcomes are typically the ones who land on their feet. It’s when you do not open up your mind to the possibility of downside that you’ll be caught flat-footed, and potentially take a much bigger hit than you otherwise would have experienced.
Just by being open to the possibility of some potential economic weakness, you may start to adjust your portfolio in the right ways to come out on top. Preservation of your wealth, during a time when many (if not most) other people are being wiped out, puts you in a tremendous position.
Not only do you maintain the value of your assets, you survive the downside, which opens you up to benefiting from all the significant bargains you might see coming your way. Especially if the stock market slides lower, or the economy puts pressure on people’s businesses and value of their real estate holdings.
Given these circumstances, a smart choice of investments that could thrive during hardships will maintain their value, or even increase, while other stocks, real estate, and all sorts of assets go on sale!