Which stock sectors do best in a recession? (2025)

Which stock sectors do best in a recession?

From a sector perspective, healthcare and consumer staples stocks have been the most resilient performers during periods of economic weakness.

What are the best performing sectors during a recession?

Historically, the industries considered to be the most defensive and better placed to fare reasonably during recessions are utilities, health care, and consumer staples.

Which stocks do well in recession?

The best recession stocks include consumer staples, utilities and healthcare companies, all of which produce goods and services that consumers can't do without, no matter how bad the economy gets.

Which sector is most affected by recession?

The arts and entertainment sector are particularly vulnerable to downturns in the economy because discretionary spending is one of the first areas to be cut when consumers tighten their budgets.

What business thrives in a recession?

If any business is recession proof, it's the good, old-fashioned grocery store. These stores sell products that people always need, regardless of economic conditions. According to Grand View Research, “The global food & grocery retail market is expected to grow at a compound annual growth rate of 3% from 2022 to 2030.”

What not to invest in during a recession?

Avoiding highly indebted companies, high-yield bonds and speculative investments will be important during a recession to ensure your portfolio is not exposed to unnecessary risk. Instead, it's better to focus on high-quality government securities, investment-grade bonds and companies with sound balance sheets.

Is it smart to buy stock during a recession?

Bottom line. If you're able to increase investments in the stock market during a downturn, it can be a great way to boost your long-term returns and achieve your investment goals.

What were the best performing stocks during the 2008 recession?

Three stocks that outperformed the S&P 500 during the 2007-09 Great Recession were Gilead Sciences (GILD 1.34%), McDonald's (MCD 0.55%), and Walmart (WMT 0.25%).

What industry is booming right now?

The computer systems design sector ranks among the fastest growing sectors in the United States. In 2022, the sector reported an output of almost $612 billion and is expected to grow to $841 billion in 2032. The sector is also expected to experience a 1.8% increase in employment in the forecast years of 2022-2032.

Who benefits from a recession?

Recessions have plenty of negative consequences, but they can provide a necessary reset for the markets. Higher interest rates that often coincide with the early stages of a recession provide an advantage to savers, while lower interest rates moving out of a recession can benefit homebuyers.

Can you make money in a recession?

Investing in companies with a strong track record of paying — and increasing — dividends can lead to stable cash flow even during recessions. Another option is to invest in dividend ETFs, which are made up of companies known for routinely paying strong dividends.

What is recession proof?

Recession proof is a term used to describe an asset, company, industry or other entity that is believed to be economically resistant to the effects of a recession. Recession-proof stocks are added to investment portfolios to safeguard them against times of economic decline, which may be the onset of a recession.

What is the best investment during a recession?

During a recession, investing in cash and cash equivalents becomes a strategic choice for investors who are hoping to preserve their capital and maintain liquidity. Cash equivalents include short-term, highly liquid assets with minimal risk, such as Treasury bills, money market funds and certificates of deposit.

What are the CDS and should I invest my money in them during recession?

A certificate of deposit (CD) is a good alternative if you're risk-averse when investing. A CD is a type of savings account that allows people to earn interest at a fixed rate that's often higher than what's available with traditional savings accounts.

Who makes money during a recession?

(NYSE:WMT) are often considered to be money-makers in times of recession. According to McKinsey report published in 2009, recession-resistant industries include consumer staples, healthcare, telecommunication services, and utilities, among more.

What industries are not recession proof?

The jobs that are the “first to go” when a recession hits are the ones that depend on consumer spending and people having copious disposable income, says Kory Kantenga, a senior economist at LinkedIn. Retail, restaurants, hotels and real estate are some of the businesses often hurt during a recession.

Should I sell my stocks before a recession?

When things are looking bleak, consider holding on to your investments. Selling during market lows can be one of the worst things you can do for your portfolio — it locks in losses. When the market evens out down the road, rebalancing may be in order.

Is it better to have cash or property in a recession?

In addition, during recessions, people with access to cash are in a better position to take advantage of investment opportunities that can significantly improve their finances long-term. Pro tip: Finding a second source of income — outside of your day job — will keep you extra prepared.

Why is cash king during a recession?

During challenging financial times, cash and liquidity is king. Having easy access to cash during a recession can help you avoid going into serious debt. As a financial planner, I can tell you that no one can predict whether we will enter a recession or if they will experience job loss.

Who got rich during the 2008 financial crisis?

In the mid-2000s, Burry was famous for placing a wager against the housing market and profited handsomely from the subprime lending crisis and the collapse of numerous major financial entities in 2008.

What are the worst investments during inflation?

The worst investment to put money into, during periods of inflation, are long-term, fixed-rate interest-bearing investments. These can include any interest-bearing debt securities that pay fixed rates, but especially those with maturities of 10 years or longer.

Should I stop putting money in my 401k during recession?

Should you reduce 401(k) contributions during a recession? You should aim to contribute as much as you can to your 401(k) regardless of economic events. A recession is one of the best times to contribute to your 401(k) because the stock market is usually down. In other words, you can buy your investments on sale.

Should I buy S&P 500 every month?

One simple and effective way to build wealth is by investing in the S&P 500 index, which contains the 500 largest companies in the U.S. You'd be surprised at how much $500 invested in the index every month over the last 20 years would be worth today.

What is most profitable during a recession?

What are some examples of businesses that thrive in recession? Due to the elasticity of demand, recession-proof industries are usually in essential services, like health care, senior services, grocery stores, and maintenance, such as plumbing and electrical.

What is the next big industry boom?

Robotics and automation industry will experience significant growth in the next few years. There are many factors that will drive this growth, including increased capital investment in robotics and automation, increasing demand from users and businesses for robotics, and the increase in the use of AI in robotics.