Investment Strategy

Welcome to the Robert Clegg blog. A recession is not the time to experiment or take risks with your investments. The most important aspect of anyone’s recession-time investment strategy should be playing it safe. This involves avoiding investments in companies that are highly leveraged or speculative. Focus on finding companies with good cash flow and low debt for the safest investment options. And as a general guideline, try not to take any major risks at an already uncertain time.

Cyclical goods and services are best avoided during times of uncertainty. During a recession, it’s best to focus on finding non-cyclical industries offering goods and services that are in constant, year-round demand like grocery stores, discount stores, alcohol manufacturers, cosmetics and funeral services.

A good general piece of investing advice from Robert Clegg is not to pile into a single sector, even when it includes the aforementioned consumer staples. Equally important is diversification across asset classes, e.g., equities, in addition to fixed income and commodities.

Though a major recession can bring seriously loses too many industries, real estate — provided wise investments are made — is usually not among them. Recession usually leads to a drop in home values, meaning that you may be able to buy a property at a lower price and sell it for a large profit when prices rise back up after the economy and markets have recovered. In the meantime, you can rent the property out to a tenant, generating reliable passive income during the interim period.

Be well, and invest wisely!