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Started By
Message
Being "recession proof"
Posted on 7/8/13 at 1:40 pm
Posted on 7/8/13 at 1:40 pm
This is kind of a spin off thread, but something I've been interested in for a while now, and am growing more and more concerned with as I am in the infancy of my investing career(and probably moreso because of my naivety on the subject).
With the recent (2008) housing "bubble/crash" and the subsequent recession, and the inevitability of future bubbles/crashes (whether near or far), how does one become "recession proof", if there is such a thing? And who gets hit the worst by these recessions?
When the stock market crashes who feels the immediate brunt of it? Is it best as a stockholder to simply ride the wave and assume it will eventually recover, because history tells us it will?
I hear stories of people who lost millions in the 2008 crash. Where does this money go? And can it be recovered?
These may be silly questions, but again I am naive on the subject, and would truly like to be educated on it. I hope we can have an intelligent discussion about it without it delving into Bitcoin or central bank conspiracy drivvle.
TIA
With the recent (2008) housing "bubble/crash" and the subsequent recession, and the inevitability of future bubbles/crashes (whether near or far), how does one become "recession proof", if there is such a thing? And who gets hit the worst by these recessions?
When the stock market crashes who feels the immediate brunt of it? Is it best as a stockholder to simply ride the wave and assume it will eventually recover, because history tells us it will?
I hear stories of people who lost millions in the 2008 crash. Where does this money go? And can it be recovered?
These may be silly questions, but again I am naive on the subject, and would truly like to be educated on it. I hope we can have an intelligent discussion about it without it delving into Bitcoin or central bank conspiracy drivvle.
TIA
8
Posted on 7/8/13 at 1:46 pm to rintintin
It's all about diversity.
Real estate income
Stocks
Ownership in multiple types of business.
Etc
Real estate income
Stocks
Ownership in multiple types of business.
Etc
Posted on 7/8/13 at 1:52 pm to rintintin
if you own land, that's pretty damn recession proof.
Posted on 7/8/13 at 1:53 pm to I Love Bama
I understand the importance of "diversifying", but that doesn't really answer my questions here.
Posted on 7/8/13 at 1:58 pm to rintintin
quote:It is an indirect answer to your question. If you are diverse, you defend yourself against a single area of the economy. It isn't recession proof, but it will allow you to ride through recessions.
I understand the importance of "diversifying", but that doesn't really answer my questions here.
If you want recession proof, you will have to sacrifice earnings for it and probably be susceptible to inflation, like CDs.
Posted on 7/8/13 at 2:07 pm to eelsuee
quote:
It is an indirect answer to your question.
Yes, and I appreciate the response, I just want to delve deeper into the issue.
Posted on 7/8/13 at 2:09 pm to rintintin
Delve deeper in to what issue?
How to be recession proof?
How to be recession proof?
Posted on 7/8/13 at 2:18 pm to rintintin
quote:No.
how does one become "recession proof", if there is such a thing?
quote:Cyclical manufacturers such as airplane and auto makers, steel and aluminum producers and most large banks which depend upon the national economy for their lending.
And who gets hit the worst by these recessions?
Makers of consumable products are considered the least affected by recessions, such as manufacturers of soap and other consumer cleaning/hygiene supplies, toilet paper, food and beverage producers and tobacco.
Those would be your Proctor and Gamble and Johnson and Johnson type companies but they still are affected because consumers switch to their cheaper brands to get by.
Posted on 7/8/13 at 2:18 pm to TheLankiestLawyer
Perhaps we could start by answering some of the questions in my OP.
Maybe if some people have personal experiences they would like to share about 2008, I'd like to hear those.
Maybe talk a little about the specifics that caused the 2008 crash.
Anything, I'm interested to learn about it.
Maybe if some people have personal experiences they would like to share about 2008, I'd like to hear those.
Maybe talk a little about the specifics that caused the 2008 crash.
Anything, I'm interested to learn about it.
Posted on 7/8/13 at 2:21 pm to LSURussian
Thank you, I was hoping you would reply in this thread.
If you don't mind me asking, how did the recession affect you personally? You can be as vague or detailed as you like.
If you don't mind me asking, how did the recession affect you personally? You can be as vague or detailed as you like.
Posted on 7/8/13 at 2:33 pm to rintintin
quote:
I hear stories of people who lost millions in the 2008 crash. Where does this money go? And can it be recovered?
Um I'm not sure if this is serious.
But....The money doesn't go anywhere till you sell the stock. You technically only lost money if the stock took a dump and then you sold.
Posted on 7/8/13 at 2:37 pm to rintintin
quote:
Thank you, I was hoping you would reply in this thread.
Thanks. Us major trolls who are part of the international banking cabal don't usually get love.
quote:From an income standpoint there was no impact on me. I own my own business which is not related to manufacturing.
how did the recession affect you personally?
Of course, the stocks I owned lost value. Luckily, I pretty much cashed out my portfolio late in 2007 with the exception of a few long term holdings that would have required me to pay some pretty hefty capital gains taxes if I had sold them.
I suggested on this board in February, 2009 that the time was near to get back into the market. The U.S. stock market hit its recession low point on March 9, 2009.
I guessed correctly that one time and it paid off big for me. I more than doubled my stock portfolio in about 18 months after I wrote that post.
But don't let anyone fool you into thinking they know what's going to happen. No one does. Not even us international banking cabal members.....
Posted on 7/8/13 at 2:42 pm to rintintin
I've been through the last two recessions - '01 and '09. The first I anticipated and got out of equities at the top, and back in at the bottom ('03). Made a bunch of money.
The second I missed. I stayed in and rode it down and back up. That was very painful when down, but satisfying when the S&P 500 came back. Some of my coworkers panicked and sold when it was down. When you sell when it's down, all you're doing is locking in losses.
If you have a time horizon of more than 8 yrs, don't worry about it. It will come back and you're still adding dividends which will boost your holdings when it comes back. Staying the course in a down market is a lot more painful than you can imagine. Ya gotta have faith.
If you're smart enough to get out and back in at the right time, you'll be way ahead. But if you miss the top, staying the course is the only alternative.
Posted on 7/8/13 at 2:52 pm to Nawlens Gator
quote:
If you're lucky enough to get out and back in at the right time, you'll be way ahead.
FIFY
Posted on 7/8/13 at 2:56 pm to LSURussian
quote:
how does one become "recession proof", if there is such a thing?
Drug Cartels
Posted on 7/8/13 at 2:58 pm to TheWiz
quote:He asked in his OP that we not bring up bitcoin....
Drug Cartels
Posted on 7/8/13 at 3:00 pm to LSURussian
quote:
Thanks. Us major trolls who are part of the international banking cabal don't usually get love.
Nah, you're still the enemy, but as they say keep your friends close and your enemies closer.
quote:
Luckily, I pretty much cashed out my portfolio late in 2007
What was your reasoning for this? Did you see it coming, or have did you have inside Intel from the central banking gestapo?
And if you wouldn't have cashed out would those stocks have rebounded if you simply rode them through the recession? Or did they never fully recover?
Posted on 7/8/13 at 3:08 pm to rintintin
quote:That was it. Definitely was it. Definitely. (In my best Rain Main voice....
did you have inside Intel from the central banking gestapo?
) Nah, everything just appeared to me to be too "blowing and going." People were buying houses, not for shelter, but to hold onto and sell in a short time. There was even a TV series called "Flip This House" or something like that which made it appear to be easy money to buy a house, put a coat of paint on it and sell it for big profits.
Banks were making 105% loan-to-value mortgage loans along with interest only loans...just speculating that home values would continue to go up as the means of repayment for the loan. That was pure craziness.
I knew something had to give. I just didn't know when.
quote:Yes. They were back to my cash out price within 2 years after 2009. As it was, I was able to sell, lock in some gains and then buy them back at about half price in March, 2009.
And if you wouldn't have cashed out would those stocks have rebounded if you simply rode them through the recession?
Posted on 7/8/13 at 3:09 pm to Nawlens Gator
quote:
Some of my coworkers panicked and sold when it was down. When you sell when it's down, all you're doing is locking in losses.
This is what's hard for me to grasp. Did they not think it would rebound ever? Or were they ready for retirement and just took the cash? Were they invested in index funds or single stocks?
Posted on 7/8/13 at 3:14 pm to rintintin
Yep on paper it's hard to grasp.
Emotions can do things to you however
Emotions can do things to you however
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