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What are some good sectors to invest in during an economic downturn?
Answers
3943 points
MNSL answered one year ago …
It is better to consider stocks with following characteristics during economic downturn.
Quality companies with higher earnings and predictable growth
Food based and food production companies (these are most reliable source of profits)
Health care
Even in above sectors we must identify companies with predictable growth and earnings, with less debt and great potential. Still some stocks are expensive in this sector. Therefore we should follow value approach now. At the moment there are outstanding stocks in above sectors through out the world.
Companies in cyclical industries such as technology, luxury items and other discretionary consumer goods, real estate, investment banking, leasing, commodities and industrial materials are particularly vulnerable during economic downturn.
2769 points
Oldman answered one year ago …
MNSL has a good handle, and I would note that those companies (by type) haven't had much of a drop in share price, because of their "defensive" nature. I would suggest looking at Utlities (when interest rates are falling) and particularly overseas, in Latin America, and Central Europe. Magyar Telephone (MTA) (Hungary Telecom); CPFL (CPL) (A Brazilian Energy consortiun).. are two good dividend payers.
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1130 points
sundarkambam answered one year ago …
If you look at the Indian economy, the following are some of the sectors which are showing good growth :
1. Beverages & Tobacco - 24.87% ( RONW),23.25 % ( Sales growth), 53.95 % ( Net profit growth) - It is an old adage that People will still drink and smoke whtever be the economy. More bad news and more smoking and drinking to fight off the depression blues !!!
2. Cement - 37.66 % ( RONW) , 46.7 % ( Sales growth) , 196.71 % !!!!!!( Net Profit growth) - It bears that Indian infrastructure is rocking !!!!!!
3. Steel - 30.72 % ( RONW), 26.08 % ( Sales growth) , 59.39 % ( Net Profit ) - Same comment as Cement.
Other rocking sectors are :
1. Hotels and Tourism
2. Information Technology
3. Real estate
265 points
MaverickInvestor answered one year ago …
Early Contraction (in the economic cycle, and where we are now, I think) - Utilities, Consumer Staples
Late Contraction (coming up next!) - Financials, Consumer Staples
249 points
engcomp answered one year ago …
And, of course, heavily marked down real estate.
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