How to Pick Stocks that Thrive in a Recession

In today’s recession, many of the previous good stock picks such as new car companies are no longer safe bets. As our spending habits change, so should our stock purchases. Though many consumers are spending less, some companies benefit and their stocks are on the rise. People are staying home more for dinner and entertainment and shopping for a bargain making such companies good stock picks.

Difficulty: Moderate

Instructions

1. AUTO PARTS New car companies are hurting as people decide to keep their old cars rather than buy new. As cars age, more repairs are needed. That makes auto parts dealers more profitable. Invest in dealers and manufacturers of auto parts.

2. COMFORT FOOD People are cooking at home more rather than eating out, and many of those meals are based around comfort and convenience. Companies that make pre-packaged meals and comfort foods such as pasta and mac and cheese are good bets.

3. DISCOUNT STORES In a recession, everyone loves a bargain. Stores such as dollar stores and discount merchandisers like Walmart, Ross, Syms, and Big Lots are booming.

4. ESCAPISM Even if money is tight, people are willing to part with their hard earned money for a bit of escapism. People are renting more and more movies to watch at home making stock in Netflix take off. Also, more and more people are spending money on alcohol and gambling, but investing in such companies is not socially responsible.