Investing Tips for the Next Global Recession

All of the worries about an overextended stock market seem to be coming true. This is especially the case with the weakening Chinese economy, falling stock market and a contagion that has spread from East to West with the rising sun. As things continue to worsen this may be an appropriate time to talk about investing tips for the next global recession. Let us look at what is happening, what is likely to be next and then some profitable investing tips for the next global recession.

The Great Fall of China

The New York Times reports on the market upheaval occasioned by further losses in the Chinese market.

Stocks in the United States tumbled on Monday morning as another sell-off that started in China led to a cascading effect around the world.

Immediately after the opening bell in New York, the Dow Jones industrial average dropped more than 1,000 points, or more than 5 percent – one of the most precipitous such plunges in recent years. The indexes pared back much of their early losses, but at midday the Dow was still down about 1.2 percent after hitting lows reached on Friday. Trading remained volatile throughout the day.

Investors’ concerns over China’s economic slowdown and a souring view of emerging economies have rattled financial markets around the world in recent days, and showed no signs of letting up. The Dow is now down 9 percent since the start of the year while the broader Standard & Poor’s 500-stock index is off 6.4 percent since Jan. 1.

What was a concern about slowing Chinese growth and its effect on emerging market raw material suppliers has turned into a concern that now only is China selling less to the world but is buying fewer raw materials as well as fewer finished products. Investing Tips for the next global recession will have to do with all markets from East to West.

Stability versus Recovery

How bad will the markets get? Where will the damage be the worst? Who will continue to prosper despite a recession? And, what stocks and other investments should an investor consider as bargains once the markets have corrected? For example, when will oil stocks bottom out and how well will they recover? The Wall Street Journal, MoneyBeat, looks at energy stocks.

The price of oil plunged on Monday amid a broad commodities selloff, as sharp declines in Chinese equities and concerns about global economic growth prompted investors to sell crude down to its lowest levels in over six years. The global oil benchmark, Brent crude, fell 2.6% to trade at $44.26 a barrel on London’s ICE Futures exchange.

Oversupply remains the overarching factor weighing down global crude prices, with record oil production from key producers like Saudi Arabia and expectations of higher Iranian oil exports following its recent nuclear deal. U.S. oil prices are being dragged lower as its shale-oil producers remain surprisingly resilient in the face of the falling market.

Oversupply meets weakening demand which will keep oil prices low for months or a year or longer. Investing tips for the next global recession probably should not include energy stocks just yet.

What Does the Expert Do?

It is said that Warren Buffet’s first rule of investing is not to lose money and that the second rule is not to forget the first! Boring but steady safe haven stocks are part and parcel of the portfolio of the most famous investor in the world according to 24/7 Wall Street.

As of his last 13D filing Buffett owned some stocks that have had boring but steady performances in recent years but are not parts of market bubble that has grown in the past two years. However, these are stocks in companies that are decades old, in many cases have good yields, a history of solid earnings and iron-clad balance sheets.

When the market is in a turmoil the best investing tips are probably to go to safe stocks, especially consumer stocks, that will maintain their value as the high flyers take headers. Cash in Euros, Dollars, Yen or Swiss francs is not a bad idea if you want to skip the stock market entirely. And, along the way, the world economy will start to recover like it always does and there will be bargains for those who pay attention.

Investing Tips for the Next Global Recession PPT

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