Is the U.S. heading for a recession?

It would seem if you’ve been watching the markets, news networks, or reading the business section, the answer would be a resounding yes. In my daily reading, I have come across two articles that represent either side of the argument.

A bad market? You ain’t seen nothin’
A worldwide decline may be harsher, longer and deeper than expected. Here’s why financials may soon be in even more trouble.

The Economy Is Fine (Really)
An article pointing out the true strength of the U.S. financial system.

While I think the second article made some great points, I’m a little more pessimistic. This brings me to a question I’ve been hearing a lot lately… “Where should I put my money now when the market is so volatile?”

Obviously your investing plan is going to differ from others depending on your age, how you handle risk, and the amount of money you have invested. Regardless, if you are looking to stay in the stock market rather than CDs, bonds, etc., the recent pullback has led to some good buying opportunities. There are a few types of stocks that generally hold their value and outperform during recessions. Look for best of breed stocks in…

  • Consumer Staples: Things like utilities, health care, food/beverages, household products. These types of stocks will generally hold up well because they offer products people will always need.
  • Dividend Paying Stocks: Look for companies that have paid a consistant dividend in the past.
  • International Exposure: U.S. companies with large international exposure, or companies in overseas markets can benefit from a weak dollar and aren’t as likely to be affected during a recession.

Like I said, your investing plan is probably going to be different from your neighbors. If you do your research, set goals, you’ll find the right investment plan for you. Just remember to think long term and don’t panic about the day-to-day fluctuations of the market.