How to Invest in a Recession

Most experts are forecasting a recession after the coronavirus outbreak, but could the new era provide opportunities to investors?

Vikram Barhat 25 March, 2020 | 9:27AM
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New York

The coronavirus has forced countries into lockdown, killed the longest bull market rally in history, and wiped out trillions in lost productivity. Worse yet, no one can predict the end of the crisis.

Wall Street banks are lining up to warn that we are already in recession or that a recession this year is inevitable, despite the extraordinary interventions from the Federal Reserve and others. Goldman Sachs now forecasts a sharp contraction in developed economies in in the second quarter, including a 24% drop in US GDP, which is twice as large as the previous post-war record.

How deep this recession could be and how long the recovery would take is still a matter of speculation. Morningstar health strategist Karen Andersen says this recession will be different from the post-2008 Great Recession and while 2020 looks bad, coronavirus-induced recession won’t cause a long-term dent in GDP.

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About Author

Vikram Barhat  is a Toronto-based financial writer specialising in investing, stock markets, personal finance and other areas of the financial services industry.