Stocks to buy in a recession

[genchan]

What stocks should I buy in a recession and what are the reasons that these stocks are good during hard economic times?

[jc3900]

Any of the consumer staples are usually pretty good bets during down times as most of their products are needs that everyone will buy no matter how bad it gets. Who knows if it gets really bad people will need a lot of alcohal to drink away their missery

[disneysteve]

Generally, you want to stick with things that people have to buy no matter what, like food, healthcare and personal products, utilities... Sin stocks also tend to do well because when people are uneasy about the future, they tend to smoke more, gamble more, drink more, etc. On the flip side, luxury items tend to hold up well. I just read an article the other day about one of the luxury yacht companies and their business is skyrocketing. They can't make the multimillion dollar yachts fast enough to keep up with demand. The ultra-rich don't feel the effects of the recession like regular people do.

[HNorton]

The previous posts are dead on. Healthcare, Consumer Staples and Utilities are a good bet. Personally I think Financials are going to be a great deal shortly. The valuations are looking more and more reasonable. One quick note on Healthcare be wary of Pharma companies, seems to be alot of risk in drug development and with us heading into a new prez cycle who knows how the next administration will feel about big Pharma.

[Broken Arrow]

Yes, I agree with the above suggestions.

As a contrarian, I don't advise running from the market. Instead, I prefer to invest into it, and financials are on the top of my short list. So long as you're careful, you can come out with great deals in that sector.

As for pharma, I also agree to be careful. Pharmaceutical companies that research and develop drugs are actually growth-orientated and volatile, depending on the outcome of the results in the pipeline. And once their patent runs out, their brand name products also have to compete against generics. So, they're not necessarily suited for weathering from recession, and typically, only people who have medical or inside knowledge somehow will do well....

Instead, pharmaceutical retailers are the ones that are typically recommended, because they don't care what company makes them, or whether it's brand name or generic (not that I currently know of anyway). So long as it's FDA-approved, they'll sell it.

Going long, they also have a bright future ahead. As the baby boomer generation ages, their need for medication will also increase. CVS (CVS), Walgreen (WAG), and even Rite-Aid (RAD) are all on my watchlist as a future buy.

[noppenbd]

Generally, you want to stick with things that people have to buy no matter what, like food, healthcare and personal products, utilities... Sin stocks also tend to do well because when people are uneasy about the future, they tend to smoke more, gamble more, drink more, etc. On the flip side, luxury items tend to hold up well. I just read an article the other day about one of the luxury yacht companies and their business is skyrocketing. They can't make the multimillion dollar yachts fast enough to keep up with demand. The ultra-rich don't feel the effects of the recession like regular people do.

I would be careful about generalizing this to all luxury items. I just heard on Clark Howard that Porsche sales are down 26% and Lexus sales are down 20% this year. Maybe the billionaires are doing well but the millionaires are tightening their belts! Seriously I would attribute this to people who are living outside their means getting a reality check.