Tags: Barron's: | 'Deep' | Recession | Coming

Barron's: 'Deep' Recession Coming

Wednesday, 31 August 2005 12:00 AM

Still, the respected financial weekly says a savvy investor can still make out handsomely despite an economic downturn.

Their solution for riding out the next recession: Sector Investing.

In a recent feature entitled "Surviving the Recession," Barron's says sectors like "consumer and housing sectors are overheating, increasing the likelihood of a deep recession."

But just as these sectors will harm the economy, key sectors will soar.

The publication notes that even when the tech market bubble collapsed "some stockpickers made money even in 2000."

Again, the key to winning was understanding sector analysis and investing. MoneyNews and its print newsletter Financial Intelligence Report has warned that the housing bubble will burst, and that key sectors are the best way to navigate the coming storm.

Recently, MoneyNews and FIR introduced our SectorTrade service, providing recommendations on how to invest in key sectors using index funds or ETFs. Find out more about SectorTrade and how to make a fortune in bad times Go Here Now.

"Distortions that have developed in the economy and the market over the past 50 years have created wide disparities in the performance of various industry sectors - and opportunities for investors to prosper as some actually rally," Kenneth Safian, head of Safian Investment Research, writes in Barron's.

As an example, Safian points to the "contrarians" who bought shares of home builders and health-maintenance organizations during the recession of 2000-01 - and have counted significant gains.

Much of the real estate, gambling, health care and consumer sectors, and small capitalization stocks, have become "richly valued" in recent years, but valuations are favorable in other sectors, primarily technology, Safian reports.

MoneyNews has just released our latest sector investing report detailing five new locked-in profit trends that we predict will be the big winners in the next six months. We're talking gains of 25% to 50% or more. Get a copy of this report now

"A critical disparity now exists between the consumer and technology sectors," he writes.

While consumer spending has escalated since the early 1990s, capital expenditures for technology products declined, and the tech industry suffered a depression from 2000 to 2002.

"But it now looks to be one of the most favorable sectors. It has been consolidating for several years, a process likely to continue, and the market seems ready for the introduction of new software and hardware to replace older products," according to the report in Barron's.

What's more, with traditional growth stocks underperforming, growth-stock managers will have to buy the large tech issues. Individual tech stocks he favors include Texas Instruments (TXN), Nokia (NOK), Qualcomm (QCOM), Microsoft (MSFT), Raytheon (RTN) and Motorola (MOT).

In Washington, the "official" outlook for the economy is favorable, so a consumer-led recession would come as a surprise to policymakers. Most of them "are in denial," according to Safian, "and those who aren't in denial are frustrated by their inability to move legislation through Congress."

Safian predicts that as economic pressures build, policymakers could move to boost infrastructure outlays, which would benefit such companies as Fluor (FLR), Halliburton (HAL) and Engelhard (EC).

Recently an urgent SectorTrade Alert was sent out to our subscribers, advising them to buy a sector that has been coldly ignored recently but is now ready to take off again. Find out more about this latest opportunity and how you can join us risk-free. Go Here Now

Biotechnology and some health care stocks may also flourish during the downturn.
"Sector analysis has been gaining in importance since the late 1950s, and for good reason," Safian concludes. "In the next recession, it could be the lifeboat that rescues savvy investors."

Recently MoneyNews's Financial Intelligence Report and its premium SectorTrade have made recommendations that are up over 50 percent on an annualized basis. Find out how to protect your investments and profit from the coming recession – Go Here Now.

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Still, the respected financial weekly says a savvy investor can still make out handsomely despite an economic downturn.Their solution for riding out the next recession: Sector Investing.In a recent feature entitled "Surviving the Recession," Barron's says sectors like...
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Wednesday, 31 August 2005 12:00 AM
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