Best Investments in a Recession

What investments do well in a recession? This article is aimed at answering this question and exploring which are the best investments in an economic recession. Recession drastically changes the economic scenario of a country and the investment scenario too. Those who were careless and overspent their funds when economy was booming, will suffer during a recession. When people forget the unwritten rule, 'Everything Comes at a Price', recession must set in to remind them of that. Unfortunately nobody can be insulated from a recession as we are all part of a globalized economic system. An economy must go through such periods of recession to emerge leaner and stronger than before.

However, those of you who were wise enough to be careful with your saving and spending before the economy went in to a slump, can profit from this period of recession. The economy slows down during a recession but things don't come to a standstill. The show must go on and it goes on! Indeed as many big businesses crash during recession, many more become stronger due to the new opportunities which the situation presents.

Best Investments During a Recessionary Period
As some of my wise and experienced seniors advised me, cash or liquidity is an asset during recession. The more liquidity you have, more are your chances of staying afloat! During recession times, liquidity is the main problem. So good investments in a recession are the one's which can ensure a steady cash flow and keep the business wheels turning.

Gold and Precious Metals
Gold is one of the most profitable investments even in periods of recession. Other precious metals like platinum and silver are also good investments in economic slowdown. There are fluctuations in gold prices but it always recovers ground as world loves gold! There are some sound reasons for gold investment being a safe option. The main reason is that the currencies of many countries are still correlated with gold. Another reason for gold and other precious metals being sound investments is that they are rare! This is the reason gold has been the investment standard since ancient times! So when in doubt, buy gold or invest in other precious metals!

Real Estate
Now why would one suggest 'Real Estate' as one of the best investments in a recession when the crashing of real estate market was the 'prime' (rather sub-prime) reason that caused the collapse? For the very same reason! The properties in prime localities and business areas, which were once beyond your reach, can be bought or rented today at substantially lower rates! If you are looking for business expansion in to a bigger premises but were holding it off due to high prices, then now is the time to go for it. Real Estate investment is a good if you can generate revenue from the business conducted in your new real estate acquisitions! If you are hoping to make money through resale of the properties then, recession is not a good time to invest in real estate. For expansion purposes, recession is a good time for real estate investment.

Treasury Bonds
Treasury bonds are some of the most low risk investments you could ever make. They are very low yield investments but the safest ones even in times of recession. If you cannot trust the US treasury, in whom will you out your trust? So treasury bonds are some of the best investments in recession. They can give you steady and fixed returns.

Your Own Business
One of the best investments is to put in money and effort in your own business. The advantage is that at least, in this kind of investment, the variables that will decide its future are mostly under your control. Thinking small is a crime and recession creates a lot of opportunities in terms of cheaper infrastructure. You can acquire and expand your business also in terms of man power as recession renders many skilled workers, to be jobless. So investing in your own business, if you have faith in its growth is a good idea!

There are more investment options like blue chip stocks with a high growth potential and foreign currency. Any choice you make, there are always going to be risks, but then there are no gains without risks. One cardinal rule often recommended by master investors is do not invest in any sector, whose developments you do not understand. In short, make an informed choice of investment within your 'circle of competence'!