2007-03-18 22:25:29 · 5 answers · asked by ilyad 1 in Business & Finance ➔ Investing
The most cyclical sectors are Consumer Discretionary and Producer Durables.
2007-03-19 02:15:17 · answer #1 · answered by BosCFA 5 · 1⤊ 0⤋
Ignore beta. Beta is a useless measure of risk.
Its tough to say what is going to get hit the hardest. You can argue the low-end consumer will be hurt the most, but will that be offset by more people (formerly "middle class") going to places like Costco, Wal-Mart, etc.?
You can also argue that luxury purchases will be hurt, but I would say the high-end consumer is more resilient so companies like Coach and Tiffany's (although the shares are overvalued) will emerge from a recession just fine - there is nearly no risk they go out of business.
Its easiest to figure out what should hold up - staples like Pepsi (ticker: PEP), Johnson & Johnson (JNJ), and healthcare (UNH comes to mind, as do established drugmakers/biotechs like AMGN).
If you buy good proven companies, a recession shouldn't be a huge problem. If you get into speculative things with risky business models, then you have a big liability if the economy goes sour.
If you want to read more on JNJ, I have a free stock brief on my website - http://www.valuestockreports.com/jnjbrief.htm
Hope this helps.
2007-03-19 18:13:54 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Think beta rather than industry groups. High beta stocks will drop like rocks.
2007-03-19 12:15:05 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Would think banking stocks
2007-03-19 05:50:43 · answer #4 · answered by Anonymous · 1⤊ 1⤋
All luxury goods - TV, Furniture etc....
2007-03-19 05:28:29 · answer #5 · answered by Ya-sai 7 · 0⤊ 0⤋