When it comes to stock options, certain products fair better during a recession than others. For example, during the recession in the 1990s Haagen Dazs ice-cream prospered because it offered customers an affordable and luxurious experience.
This year they took a punishing blow to their popularity in the US by reducing the size of their pints of ice cream from 16oc to 14oz (therefore being pints no longer.) What bothered the US people wasn`t the fact they`d no longer be able to grab `a pint` of Haagendazs though.
It was the fact they`d have to pay the same price of for less of the product. Haagendazs described this shift as economic and `due to the recession`; however, if previous performance is anything to go by they don`t really have anything to worry about. Bad publicity about the downsized cartons is much more risky to their stocks than the unsettled economic waters are.
This story illustrates a point; no stocks are ever `safe.` Even those companies which are still surviving during the recession are not impervious to harm or guaranteed to stay profitable. So, choosing stocks during a recession is more complicated than you may first suspect.

Simple Tips

There are some simple rules to improving the chances of being successful when buying stocks during a recession. In many ways, a recession is actually a good time to buy, because some stocks will be at their lowest prices for decades. If you bet on a good horse (ie. buy safe stock) as soon as we get back in to a bull market, you can sell those stocks and make a huge profit.
If however, you purchase bad stocks, you`ll be worse off than ever. So, how do you get more of the good and less of the bad? Choose resilient products such as essentials. Steer clear of expensive luxury goods and buy shares in companies which produce or sell necessities such as: food, cleaning products, medicine and other basic products. It`s also important to pay a good price, over paying for stocks could result in you losing out.

Variety isn`t only the spice of life; it`s also the bread, butter, jam and the rest of the kitchen cupboard. When it comes to stock trading putting all your eggs in one basket is a very bad idea. Food analogies aside, if you choose to buy stock during the recession, it`s crucial that you diversify your options and choose shares with a variety of different companies. Otherwise, if one industry gets hit hard and it happens to be your speciality, you`ll be devastated.
Only invest in companies which have been doing badly, once the storm is over. If you go in too early things could get worse before they get better or a company could even go in to administration. Also: never buy in to companies who are in trouble financially. Instead, wait until there is at least some solid potential for them to earn money