Industries That Perform Well In an Economic Downturn
Some industries can offer some stability, regardless of how the economy is doing.
When things aren’t going well with the economy and the stock market, it’s easy to focus on the negatives. However, not every industry experiences the same ups and downs.
There are several industries that tend to offer stability even during rocky economic conditions. This applies to investments as well as jobs and businesses that you may consider starting.
Let’s take a look at some specific industries that are usually able to handle a bear market.
Investments opportunities during a bear market
Disclosure: This information should not be taken as investment advice. Be sure to do your own research and consult a financial professional if you’re looking for personalized guidance.
It may not be the first investment that comes to mind, but farmland has a very strong history of solid returns with virtually no correlation to the stock market. If you think about it, it makes sense. Everyone needs to eat, and people will be spending money on food regardless of the economic conditions.
You may be surprised to know that investments in farmland have historically outperformed the stock market with double-digit returns for the past four decades (source). And with decreasing farmland available and growing demand for food as the population increases, there is reason to be optimistic about the future of investments in farmland.
Investing in farmland doesn’t require you to spend millions of dollars purchasing a huge farm. You could invest in a farm REIT, ETF, or mutual fund. Also, several new crowdfunding platforms like AcreTrader and FarmTogether allow you to invest in specific properties.
There will be a constant demand for healthcare regardless of the economy. The need for medical care will not go away plus people and organizations will always spend their money on healthcare.
There are plenty of ways to invest in healthcare including mutual funds, ETFs, and individual stocks. Different types of companies could be classified as healthcare including pharmaceuticals, hospitals, manufacturers of medical devices, suppliers, and more.
While consumer spending will be different during a recession, there are obviously things that people will still buy. Those who are impacted by the economic conditions may cut back on travel, eating out at restaurants, buying new cars, and other things that aren’t essential. But they are likely to continue spending money on food and beverages at grocery stores, alcohol, tobacco, and other staples.
Investing in utilities may not be all that exciting, but utilities are considered to be a fairly reliable investment. Instead of experiencing rapid growth or decline, investments in utilities tend to be slow, steady growers. And another nice perk is the fact that many utility stocks have great track records with paying dividends.
The logic behind an investment in utilities is similar to the logic behind investing in healthcare or consumer staples. Regardless of current economic conditions, people need utilities and will spend money on them.
What happens when people need to cut back on their spending? They tend to spend less on luxury items and they go with cheaper options instead.
Low-cost retailers are more likely to perform well during an economic downturn than higher-cost retailers because buyers will adjust their shopping habits accordingly. In some cases, these low-cost retailers may even see an increase in sales as consumers look for the best value when they’re shopping.
Another option that can work in any economic condition is to invest in yourself. This could involve many different things like furthering your education, earning some sort of certification, getting training in a specific skill or trade, or starting a business.
If you’re concerned about the possibility of losing your money in an investment, why not use that money to invest in yourself instead? The potential payoff is higher than any other type of investment that you can make.
Jobs and businesses that thrive during a bad economy
While no job may be completely recession-proof, these jobs are likely to continue to stay in demand. You could either look for a job or start a business in one of these fields. As you might expect, there is some overlap from the section above.
Working as a doctor or nurse can be a great option, but there are many other opportunities as well, including:
- Medical assistants
- Physical therapists
- Lab techs
- Radiology techs
- Emergency Medical Technicians (EMTs)
- And many more
Of course, some of these jobs require extensive education and training, but others require less. These professionals are in demand and will likely continue to be in demand.
Senior care overlaps with medical professionals, but it also qualifies as its own category. Like other medical-related jobs, senior care is needed and the economy doesn’t have a huge impact on that demand. Seniors and families may not have as much money to spend on luxury care or facilities during a recession, but a standard level of care is necessary in most cases.
While elective medical procedures may decline during a recession, people will continue to need medication, ensuring that pharmacists will also be needed. If you’re looking for a career with excellent earning potential and stability, this could be a good option to pursue.
Businesses always need accountants. Individuals may be tempted to take a DIY approach to save money, but many people feel more comfortable knowing that a professional is handling their taxes, even in tough economic conditions. Accounting is often considered one of the safest jobs that will be needed in any economy.
In our current tech-driven world, IT workers are always in demand. Most businesses wouldn’t have the option to significantly cut back on IT without damaging their business.
During a recession, many companies look to technology as a way to streamline processes or reduce costs, so IT professionals may even find some new opportunities.
During a recession, sales of new vehicles can drop significantly. When money is tight, most people will opt to keep their cars for longer, which means spending money on maintenance and repair.
Car maintenance costs can add up, but maintaining an older car is generally a lot cheaper than buying a new one, so it still makes plenty of sense. This means that there will be added work for mechanics and others who are involved in auto repair.
When employees are laid off, someone has to do that work. Of course, most companies will try to streamline and remaining employees may need to take on more work, but a lot of companies also outsource part of the work.
Virtual assistants can provide a wide variety of administrative tasks to provide clients with a cost-effective solution.
For small businesses, outsourcing work to a virtual assistant during a turbulent economy is cheaper and safer than hiring an employee.
If you’re interested in a flexible business that you could start very quickly, this is a great option.
Resume writers will be in demand when a lot of people are looking for jobs. Not only are there a lot of people looking for jobs during a recession, but many people are willing to do anything within their power to increase their chances of landing a job, and that includes hiring a resume writer.
If you have some experience as a resume writer or working in HR, this could be an excellent business opportunity.
Law enforcement is another necessity in any economy. Budget concerns may result in slight job losses during a recession, but in general, law enforcement is one of the more recession-proof careers. In fact, crime often increases during economic downturns and so more law enforcement may be needed.
As you face uncertain times, it’s helpful to know that opportunities do exist. Hopefully, this article provides a good rundown of sliver linings to help you to make the most of the terrible worldwide situation and use this time to do some future planning.