How to Make a Recession Investing Wishlist
In 2008, markets were in turmoil, I was 23, living at home, working double shifts in a restaurant as a line cook and expediter. I wrote down a wishlist of stocks I wanted to buy.
We all know recessions are tremendous wealth creators IF you haven’t lost your job, your home, your insurance, or your business. But many of the people cheering on a recession might not have the means to take advantage of a big dip.
If you ARE fortunate to take advantage of a recession, here’s how to make a recession investing wishlist:
Think about the companies you know, use, and love. Go on a website like Seeking Alpha and check their YTD (that means Year to Date starting from January to today) and one year chart. I like to buy ultra high quality stocks when they’re down 25% or more. Use my template to research their fundamentals.
Diversify your portfolio. Dividend stocks like JNJ, PG, MO, KO/PEP, are great ways to insulate your portfolio during recessions. Don’t want individual stocks? ETFs like SCHD, SPHD, or SPYD are great options. Use my ETF template to compare ETFs.
Keep some cash on hand to buy additional investments. This is not your emergency fund, typically a form of a HYSA. You should also NOT stop investing in your long term investments. If you DCA (dollar cost average) into a few ETFs every month, don’t stop and wait. Timing the market is a losers game. When you panic sell, you realize the loss and you don’t give your portfolio the chance to recover.
Pay attention to what is happening in the world. If there’s a recession, what companies might be impacted short term that could come back stronger when things recover? People might stop dining out. The local chain near you might go bust. Will CAVA? Or Chipotle? Or McDonald’s? Or Starbucks? People might start cutting back on excessive purchases. Will Netflix get hit short term? Will people spend less money on Amazon?
Keep your wishlist trim. If you have 100 companies on your list, and you buy 1 share of each, you won’t have very much of anything, even if lots of them do well. You’ve spread yourself too thin. Focus on a core list of 10-15 stocks where you can buy sizable positions. Nobody’s gonna retire off 1 share.
There you go. That’s how to start your wishlist.
