In a depression the GDP falls, it is the slowing of the consumption function or products and services being consumed less than an economy in balance. To hedge against recessionary effects an investor needs to look at products and services that are more necessary for society. At the micro level....Food, clothing and shelter being the main three required anywhere.
IMO, in hard times, such as the Great Depression, people will "make do", clothing and textiles are products that can be ignored by most consumers, items owned can be repaired, traded and fabricated from other items, like Scarlet's gown from drapes. The fabric store has done well long term, people will repair/recover things before buying new, if it's nicer furniture.
Shelter is what most of us deal with here, but saying multi-family or even SFH, is not really recession proof in the long run if you own in less populated areas. In a small town if people are unemployed they don't have income to pay rents or mortgages. Vacancies rise and rents are reduced as a result. Look to Detroit, certainly not a small town, but even there the population remaining is not sufficient to keep properties occupied and retain values.
Land and improvements owned is a good hedge as rents or income produced does not hinge on meeting any liabilities, with the exception of taxes. Mine are residential, one recreational and one commercial/agricultural unimproved acreage, all for my own consumption. (There are apple trees on the farm, LOL)
If you don't eat you'll die. Obviously investing in food production, processing, storage and delivery is a good bet. Don't go put your money in a restaurant chains, but in a grocery store partnership for example ( :) ) In recessionary times, restaurants can get killed.
Speaking of dying, phamaceuticals are also a good recession proof ploy, not in just medicines but also in medical equipment and assessories.
Commodities like gold and silver seem to be the choice of all of these preppers, we have over 50 pounds of this stuff and IMO not that handy except as to the appreciated value over the years. Seems many think we will be trading troy's again...LOL
My notes are pretty safe, I have held my breath over the past five years but no problems, knock on wood, but in a really bad recession defaults would/could go up.
Bars/lounge are pretty safe if they are not highly leveraged and have low overhead, I'm pretty safe with particapations and the fringe benefits aren't bad. Some folks keep drinking even in bad times.
Fixed and Variable Annuities can be fine to park retirement cash, staying with large insurance companies like Prudential and Metropolitan. These companies paid out during the Great Depression, pretty deversified for hands off, but yields are low.
Oil and gas leases in production are okay, you can buy these at a discount making them more attractive, as mentioned above production would slow eventually to demand. Retail natural gas has been good and I'd think retail heating oil in the north would be okay.
Don't do much stock anymore, seems like industrial robotics will be good and R&D in medical robotics. Since the federal government is behind the medical side, some real break throughs are on the way I'm sure.
Other stocks might be an interest; Government contractors in high tech R&D, batteries, optics, and software, but I know nothing about software, just what I'm told.
Aluminum should be getting better as China keeps demand up, guess you could pick up cans, LOL.
Lastly, guns and ammo, no angel funding here. Sales are up in recessionary times, a good indicator of social fears and consumer expectations. Wonder what the value of my AR is now? Hmmm....
