Concerns about a possible economic recession are on the minds of many investors given 2019's inverted yield curve, a deteriorating global growth outlook, and other political and economic factors.
But fear of an economic slowdown can overshadow the reality that recessions are not only natural — they're healthy. In fact, they create several investment opportunities for those who are open to them.
Recessions are, essentially, a chance for the economy to let off steam, and prices that are unsustainably high to go down, thus resetting the market. But the real danger of a recession comes when investors overgeneralize and start overreacting because they think there are no longer any good investments. Investors whose outlook is focused, instead, on value, cost basis, time and innovation will weather the storm. Being willing to set a basis at the right price and be patient leads to stronger, more impactful deals.
As an example of this mindset change in the real world, investors are currently shying away from putting money into suburban office space. Labeling these offices as an asset class they don't want to invest in causes them to miss attractive opportunities as a byproduct of trying to avoid those that are bad. Like many things in life, change — like a recession — can often set the stage for opportunity.
Rather than assuming it's a bad time to buy when the market is down, view it as a way to take advantage of investment opportunities you otherwise might not have had. The following four areas could open doors to investment growth and success: