Happy Thanksgiving!

Markets are closed today and will see a half day tomorrow for Black Friday, but that doesn’t mean we don’t have anything to talk about… 

A big thing on investors’ minds right now is the looming recession we’re all looking at. 

It’s tough to separate yourself from the stock market right now, inflation will just eat up your hard-earned cash. 

But at the same time, most areas in the stock market are down on the year and it doesn’t look like a clear bottom has been put in place yet. 

So, where can you put your cash where you won’t see it evaporate? 

Don’t worry! You have a few options ahead of you… 

In this update, I’ll share a few ways you can navigate a recession and still participate in the stock market. 

One method involves a more aggressive approach, while the other two are more defensive in nature. 

It’s important to invest in a mix you’re comfortable with, you certainly don’t want to be betting the farm on any one company or strategy. 

But these ideas will hopefully help you formulate a plan to play certain companies during the recession. 

With that, let’s take a look…

Navigating a Recession as a Trader

Not all individual stocks behave the same way during a recession… 

Some stocks see massive returns that are activated by catalysts. These names can rise in any falling market, sometimes very quickly. 

That’s one reason why I love biotech stocks. 

A healthy biotech name that can survive the rigors of putting an important experimental drug through clinical trials, or make it to a major FDA approval, bringing a potential blockbuster to market, will likely soar no matter what the market is doing. 

These stocks can defy general market conditions on this kind of news, shooting up to double or triple-digit gains in a day. 

But biotech catalyst stocks aren’t the only way to grab gains in a down market. There are less risky ways to protect yourself. 

Some stocks can act as a defense against losses during a recession. These defensive names boast the ability to maintain earnings and dividends even during an economic downturn. 

That’s because the companies behind these stocks can continue to sell products and generate revenues even when the economy slows down. 

When times are tough, people will cut back on things like luxury items and vacations, but they still need things like electricity, basic staples, and health care. 

And when looking at stocks that will help you play defensively during recessions, companies that specialize in the necessities I mentioned above are great. 

But there are other stocks to look at too, specifically, companies that pay out healthy dividends. 

Sometimes referred to as dividend aristocrats, these are companies that always pay a dividend and even raise dividend payments every year. 

Even though medical devices haven't done so well this year, the companies that purvey them are dependent on utilization. 

Utilization comes not just from consumer uses like at-home blood glucose testers, but in hospitals as well. 

There have been a lot of deferred procedures, specifically elective procedures, thanks to COVID, that I would expect to create a huge backlog that we could see materialize in some medical device companies' bottom lines. 

So, be on the lookout for some of these more defensive plays. Having a few of these names in your portfolio might be the difference between a red and green holiday season.