Types of Stocks That Will Survive Economic Collapse
The one thing the stock market hates more than bad news is uncertainty. Given the world’s economic state of affairs lately, investors could not be in a more murky spot.
By looking into the rapidly declining velocity of money, plus understanding the historical actions of “The Q Ratio,” we are in one of the most precarious situations that we have seen in a long time.
But before you rush to get out of stocks completely, or to bury your head in the sand, you should keep in mind that more millionaires were created during the Great Depression than any other time in human history.
And this current situation could play out in a very similar fashion, where big opportunities for profit come out of economic hardships.
The good news is that there are plenty of investments you can make now which will help protect you from any chaos or deterioration of the overall stock markets, and the very economy itself. By getting involved in the types of businesses which survive and thrive in the difficult times, you’re setting yourself up to be in a situation that is both more profitable, and more resilient. In other words, you can enrich yourself while making sure that your investment dollars live to fight another day.
Some industries will do well in spite of any economic recession or stock market meltdown — and in many cases even perform very strongly because of that recession or meltdown — include:
It doesn’t matter if the stock markets are crashing, or how weak the economy is performing.
The facts are that certain pharmaceutical drugs and medical treatments will still be performed, or purchased, regardless of the big picture.
If an expensive drug is the only thing which allows you to sleep at night, or stop your leg from spasming, or maintain your balance, then you find a way to pay for that medication no matter what.
This is why many pharmaceutical companies and healthcare technologies are considered to be defensive industries — they often perform irrelevant to the actions of the underlying economy. If you are invested, your dollars in healthcare and pharma businesses are more likely to survive in tough times, compared to most other stocks.
In fact, many people will skip meals before they’ll skip drugs. They might not purchase paper towels, or go out to restaurants, if that means they can’t pay the $100 a year storage fee for their child’s cord blood to be kept frozen.
When it comes to healthcare, the rules are different than they are for most other types of investments.
One of the top performing investment complexes so far in 2016, even during the time where the stock market got off to its worst start ever, has been precious metals. In fact, most gold-mining production companies have spiked pretty dramatically over the last few months, and the outlook for gold, silver and platinum prices remains high.
Worldwide money printing has gone off the rails (nations from America to Japan are creating far too much). The American dollar has lost 95% of its value since the year 1900. This partially reinforces our expectation for higher precious metals prices.
We expect gold prices to lead the entire commodities complex higher, with even more significant gains from silver and platinum — the silver to gold ratio, and the platinum to gold ratio, have never been so weak, meaning that both silver and platinum are excessively undervalued in relation to gold.
The fact that we expect gold to increase in value significantly from current levels, implies that the “even weaker” silver and platinum prices are setting investors up for even more impressive gains on a percentage basis. For example, gold might go up 50%, but over the same time you’ll probably see both silver and platinum increase by more than 100%.
Given the fact that precious metals act as a great form of insulation against global chaos and stock market meltdowns, means they act almost as a form of natural insurance.
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.
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).
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!
Types of Stocks That Will Survive Economic Collapse Conclusion
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