It goes without saying, the ideal time to buy investments is when they’re at a low point, and selling them when they’ve increased in value.
Some investors do this by watching a country’s economic cycle.
If you’re clever, you can identify the stage of the economic cycle you’re in, and purchase your investments in the economic cycle that they’re most likely to be lower in value.
Here's an explanation of what a slowdown, a recession and a depression is, and which industries to consider (or avoid) buying investments in, over these times.
A slowdown occurs when the rate of growth decelerates – but national output is still rising. If the economy grows without falling into recession, this is called a soft-landing.
A recession is a fall in real GDP for two consecutive quarters (six months).
Some key indicators are:
What's the difference between a recession and a depression?
What's the best industries to invest in during this time?
If you start seeing the signs of an economic slowdown, look at the defensive-oriented sectors — those in which company's revenues are supported by selling products which people are less likely to cut back on during a recession.
Industries would include consumer staples, utilities, telecommunication services, and health care. So products you might consider would be toothpaste, electricity, phone service, and prescription drugs.
Historically, these sectors have performed well during a recession.