What's the best investment strategy in the event of a recession?

The UK has already experienced one quarter of negative growth and a second may follow which would mean we’re in a recession.

What is the best investment strategy? Invest in gold?

I know the '08 financial crisis was a global one so perhaps the recession will only be limited to the UK and in this case maybe US or Asian stocks would be a good idea to consider?

Like in every situation:
Msci world etf (mostly)
Plus EM etf (some)
Plus US/EU small cap etf (some)
Plus Some precious metals (e.g. gold, silver)

That’s for long investors. If you love gambling you can short stocks and go long in gold.

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From what I understand bonds & gold usually considered safe bets, but I saw this the other day which the guy suggests that these (along with pre-paid plans & trends) are things millionaires don’t invest in (video goes into more detail as to the reasons why):

Of course different strategies work for different people e.g. Some people did get really rich off the crypto trend (while others lost tons as he points out), so I guess it really depends on your aims e.g. Do you want to take the risks in getting rich or do you want to play it safe and just beat inflation until the market recovers.

Of course that article/video is just one guy’s opinion and not everyone might agree with him. As always - do your own research is the best thing to do :slightly_smiling_face:

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Do you need your capital in the next 5 years?

  • Yes/maybe = Invest in G7 Government Bonds
  • No = Invest in high quality large cap (10B+) equities

To offer some reassurance on this matter. During the financial crisis I held my nerve, dumped as much money into the stock markets as I could & 5 years ago was able to pay off my mortgage. Assuming you remain employed & can hold your nerve, a recession is likely to be your best friend

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Exactly what I’ll be doing :slight_smile: recessions and more uncertainty means cash is king and can go a lot further should you keep investing

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When the markets went nuts at the end of 2018 I pumped everything I could into funds. I made 20% in a few weeks on some.of those.

The market had dipped recently and again I’ve thrown money at it I had kept by. Maybe with Brexit there will be another big dip who knows.

But generally the best advice out there (not that I am giving advice of course) is to save and invest regularly and not try and time the markets.

It’s been my experience that most dips are brief and the market quickly corrects most of it and then slowly rebuilds the rest.

Remember Bob…

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Hold your stocks and the vast majority will rise again within 18 months (especially large cap). And buy good companies at a discount.

Don’t sell in a panic.

Pretty simple stuff really.

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Spot on. If all the great large caps you buy on discount all fail and the system fails. Then your money’s not going to be worth much if you save it anyway. It’s very simple advice but buy the dip…buy value. That’s why Berkshire are hoarding $122B for the next correction.

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Here we go!

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To be honest I’m doing some buying end of the month. So looking for this to happen :joy:

Was reading the same.

TL;DR US treasury bond yield curves on 2-year and 10-year debt inverted for the first time since the financial crisis. 10 year bonds are now priced more attractively than 2-year bonds. Recession is on the horizon.

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The black friday sale coming soon!

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Didn’t something similar happened a few months ago?

If memory serves, it was the closest since 2007 a few months back however didn’t go negative until earlier today

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I have been reading lots about the “all weather portfolio” may be a way to give your investments a fighting chance in the down turn?

Interesting thoughts here

https://www.bloomberg.com/opinion/articles/2019-08-13/the-bond-market-is-in-a-bubble-jz9atl25

As the trade war is not getting solved and cheap money will flood financial markets in a downturn it’s hard to say when the bubble will burst.

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I’d read Warren Buffett’s letters pre- and post-2008. Don’t watch CNBC and Bloomberg and don’t listen to analysts. There’s a reason why they aren’t billionaires. Read this book - it’s a small investment https://www.amazon.com/MONEY-Master-Game-Financial-Freedom-ebook/dp/B00MZAIU4G
He interviewed people who normally wouldn’t give interviews. Wall St/City’s interests aren’t aligned with normal folks’ interests.

Diversify before hopefully, hang on tight, don’t panic and think carefully about the long-term prospects of buying at a discount during a bear market

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Agreed - keep Bob always in your mind. Don’t think about planning for a recession unless you’re actually likely to need your invested money during that time. Otherwise continue to invest in a diverse portfolio and in the long run you will do well. Don’t think you can ride the market waves like the big guys can - most of the time it’s because they are creating the waves themselves.

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Deploying more cash into account. Sold some stocks with profit and will bombard ETFs when black Friday comes!

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